Reuben, Ernesto and Sapienza, Paola and Zingales, Luigi (2008): Time discounting for primary and monetary rewards.
Download (339Kb) | Preview
This paper shows that there is a positive and statistically significant correlation between the short-term discount rate over a monetary reward and the short-term discount rate over a primary reward (chocolate). This correlation, however, is absent among subjects who do not like chocolate and are not hungry. This suggests that monetary rewards are suitable for the study of intertemporal choice. In fact, given the problems associated with the use of primary rewards (differing tastes for the good, hunger, and possible satiation), we argue that measurement with monetary rewards is more reliable.
|Item Type:||MPRA Paper|
|Original Title:||Time discounting for primary and monetary rewards|
|Keywords:||time preferences; hyperbolic discounting; intertemporal choice|
|Subjects:||D - Microeconomics > D9 - Intertemporal Choice and Growth > D90 - General
D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
|Depositing User:||Ernesto Reuben|
|Date Deposited:||20. Sep 2008 05:31|
|Last Modified:||12. Feb 2013 14:26|
Ainslie, G. and V. Haendel (1983). The motives of the will. In Gottheil, E., K. Durley, T. Skodola, and H. Waxman (eds.) Etiologic Aspects of Alcohol and Drug Abuse. Springfield: Charles C. Thomas. pp. 119-140.
Bernheim, D.B. and A. Rangel (2004). Addiction and cue-triggered decision processes. American Economic Review 94: 1558-1590.
Besharov, G. and B. Coffey (2003). Reconsidering the experimental evidence for quasi-hyperbolic discounting. Working paper. Duke University.
Bickel, W.K, A.L. Odum, and G.J. Madden (1999) Impulsivity and cigarette smoking: Delay discounting in current, never, and exsmokers. Psychopharmacology 146:447-454
Brown, A.L., C.F. Camerer, and Z.E. Chua (2007). Learning and visceral temptation in dynamic savings experiments. Working paper. California Institute of Technology.
Carroll, G.D., J.J. Choi, D. Laibson, B.C. Madrian, and A. Metrick (2007). Optimal defaults and active decisions. Working paper No. W11074. NBER.
Choi, J.J., D. Laibson, B.C. Madrian, and A. Metrick (2006). Saving for retirement on the path of least resistance. In McCaffrey, E. and J. Slemrod (eds.) Behavioral Public Finance: Toward a New Agenda. New York: Russell Sage Foundation. pp 304-351.
Coller, M. and M.B. Williams (1999). Eliciting individual discount rates. Experimental Economics 2: 107-127.
Coffey, S.F., G.D. Gudleski, M.E. Saladin, and K.T. Brady (2003). Impulsivity and rapid discounting of delayed hypothetical rewards in cocaine-dependent individuals. Experimental and Clinical Psychopharmacology 11: 18-25.
Cubitt, R.P. and D. Read (2007). Can intertemporal choice experiments elicit time preferences for consumption? Experimental Economics 10: 369-389.
Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics 10: 171-178.
Frederick, S., G. Loewenstein, and T. O’Donoghue (2002). Time discounting and time preference: A critical review. Journal of Economic Literature 40: 351-401.
Fudenberg, D. and D. Levine (2006). A dual self model of impulse control. American Economic Review 96: 1449-1476.
Green, L., J. Myerson, and E. Mcfadden (1997). Rate of temporal discounting decreases with amount of reward. Memory & Cognition 25: 715-723.
Green, L. and J. Myerson (2004). A discounting framework for choice with delayed and probabilistic rewards. Psychological Bulletin 130: 769–792.
Harris, C. and D. Laibson (2001). Dynamic choices of hyperbolic consumers. Econometrica 69: 935-957.
Karp, L. (2005). Global warming and hyperbolic discounting. Journal of Public Economics 89: 261-282.
Kirby, K.N. (1997). Bidding on the future: Evidence against normative discounting of delayed rewards. Journal of Experimental Psychology: General 126: 54-70.
Kirby, K.N., N.M. Petry, W.K. Bickel (1999) Heroin addicts have higher discount rates for delayed rewards than non-drug using controls. Journal of Experimental Psychology: General 128: 78-87
Knutson, B., C.M. Adams, G.W. Fong, and D. Hommer (2001). Anticipation of increasing monetary reward selectively recruits nucleus accumbens. The Journal of Neuroscience 21: RC159.
Laibson, D. (1997). Golden eggs and hyperbolic discounting The Quarterly Journal of Economics 112: 443-447.
Loewenstein, G. and T. O’Donoghue (2004). Animal spirits: Affective and deliberative influences on economic behavior. Working paper. Carnegie Mellon University.
Madden, G.J., W.K. Bickel, and E.A. Jacobs (1999). Discounting of delayed rewards in opioid-dependent outpatients: Exponential or hyperbolic discounting functions? Experimental Clinical Psychopharmacology 7: 284-293.
Madden, G.J., N.M. Petry, G.J. Badger, W.K. Bickel (1997). Impulsive and self-control choices in opioid-dependent patients and nondrug-using control participants: drug and monetary rewards. Experimental Clinical Psychopharmacology 5: 256-263.
McClure, S.M., D. Laibson, G. Loewenstein, and J.D. Cohen (2004). Separate neural systems value immediate and delayed monetary rewards. Science 306: 503-507.
McClure, S.M., K.M. Ericson, D.I. Laibson, G. Loewenstein, and J.D. Cohen (2007). Time discounting for primary rewards. The Journal of Neuroscience 27: 5796-5804.
McLeish, K.N. and R.J. Oxoby (2007). Gender, affect and intertemporal consistency: An experimental approach. Discussion Paper No. 2663. University of Calgary
Petry, N.M. (2001). Delay discounting of money and alcohol in actively using alcoholics, currently abstinent alcoholics, and controls. Psychopharmacology 154: 243-250.
Phelps, E.S. and R.A. Pollak (1968). On second-best national saving and game-equilibrium growth. Review of Economic Studies35: 85-199.
Read D., S. Frederick, B. Orsel, and J. Rahman (2005). Four score and seven years from now: The date/delay effect in temporal discounting. Management Science 51: 1326-1335.
Reuben, E., P. Sapienza, and L. Zingales (2008). Procrastination and Impatience. NBER working paper 13713.
Shui, H. and L.M. Ausubel (2005). Time inconsistency in the credit card market. Working paper. University of Maryland.
Strotz, R.H. (1955-56). Myopia and inconsistency in dynamic utility maximization. Review of Economic Studies 23:165-80.
Thaler, R.H. (1981). Some empirical evidence on dynamic inconsistency Economics Letters 8: 201-207.
Tucker, B., D.A. Steck, and J. Tombo (2007). Experimental evidence for time preference among Mikea forager-farmers: Implications for subsistence transitions and conservation planning. Working paper. University of Georgia.
White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 48:817-38.