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Intertemporal Choice Experiments and Large-Stakes Behavior

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  • Aycinena, D
  • Blazsek, S
  • Rentschler, L
  • Sprenger, C

Abstract

Intertemporal choice experiments are frequently implemented to make inference about time preferences, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a decision on the desire to smooth a large-stakes payment — around 10% of annual income — through time. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are closely predicted by experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of experimentally elicited intertemporal preferences for large-stakes decisions.

Suggested Citation

  • Aycinena, D & Blazsek, S & Rentschler, L & Sprenger, C, 2019. "Intertemporal Choice Experiments and Large-Stakes Behavior," Documentos de trabajo - Alianza EFI 18985, Alianza EFI.
    • Handle: RePEc:col:000561:018985
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    Cited by:

    1. James Andreoni & Christina Gravert & Michael A. Kuhn & Silvia Saccardo & Yang Yang, 2018. "Arbitrage Or Narrow Bracketing? On Using Money to Measure Intertemporal Preferences," NBER Working Papers 25232, National Bureau of Economic Research, Inc.
    2. Stephen L. Cheung & Agnieszka Tymula & Xueting Wang, 2022. "Present bias for monetary and dietary rewards," Experimental Economics, Springer;Economic Science Association, vol. 25(4), pages 1202-1233, September.
    3. David J. Freeman & Kevin Laughren, 2024. "Task completion without commitment," Experimental Economics, Springer;Economic Science Association, vol. 27(2), pages 273-298, April.

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    More about this item

    Keywords

    Structural estimation; Out-of-sample prediction; Discounting; Convex Time Budget;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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