Framing Effects in Intertemporal Choice: A Nudge Experiment

Faralla, Valeria and Novarese, Marco and Ardizzone, Antonella (2017): Framing Effects in Intertemporal Choice: A Nudge Experiment. Published in: Journal of Behavioural and Experimental Economics , Vol. 2017, No. 71 : pp. 13-25.

Abstract

This paper experimentally investigates the framing effects of intertemporal choice using two different elicitation modes, termed classical and penal. In the classical mode, participants are given the choice between receiving a certain amount of money, smaller and sooner, today and a higher amount, larger and later, delayed (e.g., “€55 today vs. €75 in 61 days”). This is referred to as the standard mode. In the penalty mode, the participant must give up an explicit amount of money in order to choose the smaller and sooner option (e.g., “€75 in 61 days vs. €55 today with a penalty of €20”). This is the explicit mode. We find that estimates of individual discount rates are lower in the explicit mode than in the standard mode. This result suggests that even very simple information about the amount of money one must surrender for choosing the earlier option increases delayed consumption. The finding has relevant implications for self-control and long-term planning in intertemporal choice.

• Item Type: MPRA Paper
• Language: English
• Keywords: framing, explicit penalty, intertemporal choice, discounting, nudge
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; D - Microeconomics > D9 - Intertemporal Choice > D90 - General

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