Individual decision-making experiment with risk and intertemporal choice: a replication study

Morone, Andrea and Casamassima, Alessia and Cascavilla, Alessandro (2021): Individual decision-making experiment with risk and intertemporal choice: a replication study.

Abstract

This work aims to study the individual intertemporal decision-making process under risk and uncertainty, by replicating via an online experiment the design proposed by Anderson and Stafford (2009). The structure of questionnaire is the same as the one of the original experiment, in which subjects might choose between two options that differ in resolution time. According to the experimental results, we show that the percentage of subjects choosing later option increases as the value of the later option increases, and the percentage of subjects choosing later option is smaller the longer the temporal delay between the two options. Differently from the original study, we found out that risk does not make subjects less patient and there are interactions between risk and the length temporal delay.

• Item Type: MPRA Paper
• Language: English
• Keywords: Intertemporal decision-making; Risk; Intertemporal choice; Experiment.
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B40 - General; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty

References

Anderson L.R., Stafford S.L., (2009), “Individual decision-making experiment with risk and intertemporal choice”, Journal of Risk and Uncertainty, Vol. 38, n.1

Ellsberg, D., (1961), “Risk, Ambiguity, and the Savage Axioms”, The Quarterly Journal of Economics, vol. 75, no. 4, pp. 643–669.

Samuelson P. (1937), “A Note on Measurement of Utility”, Review of Economic Studies, Volume 4, Issue 2, Pages 155–161.

Von Neumann, J., & Morgenstern, O. (1947), “Theory of games and economic behavior", Princeton, NJ: Princeton University Press.