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Time-Inconsistent Generosity: Present Bias across Individual and Social Contexts

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  • Kölle, Felix
  • Wenner, Lukas

Abstract

We investigate the presence and stability of dynamically inconsistent time preferences across contexts with and without interpersonal trade-offs. In a longitudinal experiment subjects make a series of intertemporal allocation decisions of real-effort tasks between themselves and another person. We find substantial time inconsistency in generosity: agents become disproportionally more selfish when decisions have immediate rather than delayed consequences. Based on our theoretical framework, structural estimations reveal that this is because agents exhibit present bias in own but not in others' consumption. We show that very similar differences in present bias are observed in the absence of any interpersonal trade-offs, when agents decide either for themselves or on behalf of another person. At the individual level, we find that present bias in own consumption is a stable behavioral trait which is correlated across individual and social contexts.

Suggested Citation

  • Kölle, Felix & Wenner, Lukas, 2019. "Time-Inconsistent Generosity: Present Bias across Individual and Social Contexts," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203505, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc19:203505
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    References listed on IDEAS

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    Cited by:

    1. de Oliveira, Angela C.M. & Jacobson, Sarah, 2021. "(Im)patience by proxy: Making intertemporal decisions for others," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 83-99.
    2. Lukas Kiessling & Shyamal Chowdhury & Hannah Schildberg-Hörisch & Matthias Sutter, 2021. "Parental Paternalism and Patience," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2021_03, Max Planck Institute for Research on Collective Goods.

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    More about this item

    Keywords

    Present bias; altruism; stability; real effort; dictator game; intertemporal choice;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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