IDEAS home Printed from https://ideas.repec.org/p/tut/cremwp/201329.html
   My bibliography  Save this paper

Patience and Time Consistency in Collective Decisions

Author

Listed:
  • Laurent Denant-Boèmont

    (CREM UMR CNRS 6211, University of Rennes 1, France)

  • Enrico Diecidue

    (INSEAD, Fontainebleau, France)

  • Olivier L'Haridon

    (CREM UMR CNRS 6211 and GREGHEC, University of Rennes 1, France)

Abstract

We present new evidence from the lab on the outcomes resulting from collective and individual decisions over time. We combined static and longitudinal methods to test four conditions on individual and collective time preferences: impatience, stationarity, age independence, and dynamic consistency. The collective decision process was designed to favor coordination through initial communication over voting intentions. Our main results are the following. First, individuals were impatient and deviated from consistent behavior. On the other hand, groups made patient and highly consistent decisions. Our voting mechanism helped the groups to converge and make stable and dynamically consistent decisions.

Suggested Citation

  • Laurent Denant-Boèmont & Enrico Diecidue & Olivier L'Haridon, 2013. "Patience and Time Consistency in Collective Decisions," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201329, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  • Handle: RePEc:tut:cremwp:201329
    as

    Download full text from publisher

    File URL: https://crem-doc.univ-rennes1.fr/wp/2013/201329.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Edward L. Glaeser & Cass R. Sunstein, 2007. "Extremism and Social Learning," NBER Working Papers 13687, National Bureau of Economic Research, Inc.
    2. Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2004. "Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 725-741, December.
    3. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2010. "Are Risk Aversion and Impatience Related to Cognitive Ability?," American Economic Review, American Economic Association, vol. 100(3), pages 1238-1260, June.
    4. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    5. W. Viscusi & Owen Phillips & Stephan Kroll, 2011. "Risky investment decisions: How are individuals influenced by their groups?," Journal of Risk and Uncertainty, Springer, vol. 43(2), pages 81-106, October.
    6. Eva Wölbert & Arno Riedl, 2013. "Measuring Time and Risk Preferences: Realiability, Stability, Domain Specificity," CESifo Working Paper Series 4339, CESifo Group Munich.
    7. Wolfgang Luhan & Martin Kocher & Matthias Sutter, 2009. "Group polarization in the team dictator game reconsidered," Experimental Economics, Springer;Economic Science Association, vol. 12(1), pages 26-41, March.
    8. R. H. Strotz, 1955. "Myopia and Inconsistency in Dynamic Utility Maximization," Review of Economic Studies, Oxford University Press, vol. 23(3), pages 165-180.
    9. Fishburn, Peter C & Rubinstein, Ariel, 1982. "Time Preference," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(3), pages 677-694, October.
    10. Kirsten Rohde, 2010. "The hyperbolic factor: A measure of time inconsistency," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 125-140, October.
    11. Yoram Halevy, 2008. "Strotz Meets Allais: Diminishing Impatience and the Certainty Effect," American Economic Review, American Economic Association, vol. 98(3), pages 1145-1162, June.
    12. James Andreoni & Charles Sprenger, 2012. "Estimating Time Preferences from Convex Budgets," American Economic Review, American Economic Association, vol. 102(7), pages 3333-3356, December.
    13. Ned Augenblick & Muriel Niederle & Charles Sprenger, 2015. "Editor's Choice Working over Time: Dynamic Inconsistency in Real Effort Tasks," The Quarterly Journal of Economics, Oxford University Press, vol. 130(3), pages 1067-1115.
    14. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    15. Brune, Lasse & Gine, Xavier & Goldberg, Jessica & Yang, Dean, 2011. "Commitments to save : a field experiment in rural Malawi," Policy Research Working Paper Series 5748, The World Bank.
    16. Carlsson, Fredrik & He, Haoran & Martinsson, Peter & Qin, Ping & Sutter, Matthias, 2012. "Household decision making in rural China: Using experiments to estimate the influences of spouses," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 525-536.
    17. Dhillon, Amrita & Lockwood, Ben, 2004. "When are plurality rule voting games dominance-solvable?," Games and Economic Behavior, Elsevier, vol. 46(1), pages 55-75, January.
    18. S. Dellavigna., 2011. "Psychology and Economics: Evidence from the Field," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    19. Bostic, Raphael & Herrnstein, R. J. & Luce, R. Duncan, 1990. "The effect on the preference-reversal phenomenon of using choice indifferences," Journal of Economic Behavior & Organization, Elsevier, vol. 13(2), pages 193-212, March.
    20. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
    21. Stéphane Zuber, 2011. "The aggregation of preferences: can we ignore the past?," Theory and Decision, Springer, vol. 70(3), pages 367-384, March.
    22. Matthias Messner & Mattias Polborn, 2007. "Strong and coalition-proof political equilibria under plurality and runoff rule," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(2), pages 287-314, January.
    23. Thomas Epper & Helga Fehr-Duda & Adrian Bruhin, 2011. "Viewing the future through a warped lens: Why uncertainty generates hyperbolic discounting," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 169-203, December.
    24. repec:cup:apsrev:v:87:y:1993:i:01:p:102-114_09 is not listed on IDEAS
    25. Marco Casari & Davide Dragone, 2015. "Choice reversal without temptation: A dynamic experiment on time preferences," Journal of Risk and Uncertainty, Springer, vol. 50(2), pages 119-140, April.
    26. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June.
    27. Azfar, Omar, 1999. "Rationalizing hyperbolic discounting," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 245-252, February.
    28. Jordi Brandts & David J. Cooper, 2006. "A Change Would Do You Good .... An Experimental Study on How to Overcome Coordination Failure in Organizations," American Economic Review, American Economic Association, vol. 96(3), pages 669-693, June.
    29. Andrew Caplin & John Leahy, 2004. "The supply of information by a concerned expert," Economic Journal, Royal Economic Society, vol. 114(497), pages 487-505, July.
    30. Myong-Il Kang & Shinsuke Ikeda, 2010. "Time Discounting and Smoking Behavior under Tax Hikes," ISER Discussion Paper 0782, Institute of Social and Economic Research, Osaka University.
    31. E. S. Phelps & R. A. Pollak, 1968. "On Second-Best National Saving and Game-Equilibrium Growth," Review of Economic Studies, Oxford University Press, vol. 35(2), pages 185-199.
    32. repec:ubc:pmicro:yoram_halevy-2012-19 is not listed on IDEAS
    33. Matthew O. Jackson & Leeat Yariv, 2015. "Collective Dynamic Choice: The Necessity of Time Inconsistency," American Economic Journal: Microeconomics, American Economic Association, vol. 7(4), pages 150-178, November.
    34. Boris Maciejovsky & Matthias Sutter & David V. Budescu & Patrick Bernau, 2013. "Teams Make You Smarter: How Exposure to Teams Improves Individual Decisions in Probability and Reasoning Tasks," Management Science, INFORMS, vol. 59(6), pages 1255-1270, June.
    35. Takeuchi, Kan, 2011. "Non-parametric test of time consistency: Present bias and future bias," Games and Economic Behavior, Elsevier, vol. 71(2), pages 456-478, March.
    36. Manel Baucells & Franz H. Heukamp, 2012. "Probability and Time Trade-Off," Management Science, INFORMS, vol. 58(4), pages 831-842, April.
    37. Matthew O. Jackson & Leeat Yariv, 2014. "Present Bias and Collective Dynamic Choice in the Lab," American Economic Review, American Economic Association, vol. 104(12), pages 4184-4204, December.
    38. Francisco Perez-Arce, 2011. "The Effect of Education on Time Preferences," Working Papers 844, RAND Corporation.
    39. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    40. James Andreoni & Charles Sprenger, 2012. "Risk Preferences Are Not Time Preferences," American Economic Review, American Economic Association, vol. 102(7), pages 3357-3376, December.
    41. Yoram Halevy, 2015. "Time Consistency: Stationarity and Time Invariance," Econometrica, Econometric Society, vol. 83, pages 335-352, January.
    42. Mohammed Abdellaoui & Han Bleichrodt & Olivier l’Haridon, 2013. "Sign-dependence in intertemporal choice," Journal of Risk and Uncertainty, Springer, vol. 47(3), pages 225-253, December.
    43. Myong‐Il Kang & Shinsuke Ikeda, 2014. "TIME DISCOUNTING AND SMOKING BEHAVIOR: EVIDENCE FROM A PANEL SURVEY-super-," Health Economics, John Wiley & Sons, Ltd., vol. 23(12), pages 1443-1464, December.
    44. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    45. Uri Benzion & Amnon Rapoport & Joseph Yagil, 1989. "Discount Rates Inferred from Decisions: An Experimental Study," Management Science, INFORMS, vol. 35(3), pages 270-284, March.
    46. George Loewenstein & Drazen Prelec, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 573-597.
    47. Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer;Economic Science Association, vol. 2(2), pages 107-127, December.
    48. Arthur J. Robson & Balázs Szentes, 2014. "A Biological Theory of Social Discounting," American Economic Review, American Economic Association, vol. 104(11), pages 3481-3497, November.
    49. Simone Schaner, 2015. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 135-174, April.
    50. Thomas Epper & Helga Fehr-Duda, 2012. "The missing link: Unifying risk taking and time discounting," ECON - Working Papers 096, Department of Economics - University of Zurich.
    51. Antony Millner & Geoffrey Heal, 2014. "Resolving intertemporal conflicts: Economics vs. Politics," GRI Working Papers 173, Grantham Research Institute on Climate Change and the Environment.
    52. Jacob K. Goeree & Leeat Yariv, 2011. "An Experimental Study of Collective Deliberation," Econometrica, Econometric Society, vol. 79(3), pages 893-921, May.
    53. Horowitz, John K., 1992. "A test of intertemporal consistency," Journal of Economic Behavior & Organization, Elsevier, vol. 17(1), pages 171-182, January.
    54. Serdar Sayman & Ayse Öncüler, 2009. "An Investigation of Time Inconsistency," Management Science, INFORMS, vol. 55(3), pages 470-482, March.
    55. Christian Gollier & Richard Zeckhauser, 2005. "Aggregation of Heterogeneous Time Preferences," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 878-896, August.
    56. Paul A. Samuelson, 1937. "A Note on Measurement of Utility," Review of Economic Studies, Oxford University Press, vol. 4(2), pages 155-161.
    57. Gary Charness & Matthias Sutter, 2012. "Groups Make Better Self-Interested Decisions," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 157-176, Summer.
    58. Stephan Meier & Charles D. Sprenger, 2015. "Temporal Stability of Time Preferences," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 273-286, May.
    59. Gerardi, Dino & Yariv, Leeat, 2007. "Deliberative voting," Journal of Economic Theory, Elsevier, vol. 134(1), pages 317-338, May.
    60. Bleichrodt, Han & Rohde, Kirsten I.M. & Wakker, Peter P., 2009. "Non-hyperbolic time inconsistency," Games and Economic Behavior, Elsevier, vol. 66(1), pages 27-38, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carbone, Enrica & Infante, Gerardo, 2015. "Are groups better planners than individuals? An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 112-119.

    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tut:cremwp:201329. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CODA-POIREY Hélène). General contact details of provider: http://edirc.repec.org/data/crmrefr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.