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Doing it now or later with payoff externalities: Experimental evidence on social time preferences

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  • Giovanni Ponti
  • Ismael Rodriguez-Lara
  • Daniela Di Cagno

Abstract

We report experimental evidence on the effects of social preferences on intertemporal decisions. To this aim, we set up an intertemporal Dictator Game and investigate whether (and how) subjects change their choices, compared with those they had taken in absence of any payoff externality in a previous stage of the experiment. We run two treatments -INFO and BELIEF, respectively- depending on whether Dictators know -or are asked to elicit- their assigned Recipients' risk and time preferences. We find that high (own) risk aversion is associated with low (own) discounting. We also found that (heterogeneous) social time preferences are signifcant determinants of choices, in that Dictators display a marked propensity to account for the Recipients' intertemporal concerns.

Suggested Citation

  • Giovanni Ponti & Ismael Rodriguez-Lara & Daniela Di Cagno, 2014. "Doing it now or later with payoff externalities: Experimental evidence on social time preferences," Working Papers CESARE 1/2014, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    • Handle: RePEc:lui:cesare:1401
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    Cited by:

    1. Lau Lilleholt, 2019. "Cognitive ability and risk aversion: A systematic review and meta analysis," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(3), pages 234-279, May.
    2. Cueva, Carlos & Iturbe-Ormaetxe, Iñigo & Mata-Pérez, Esther & Ponti, Giovanni & Sartarelli, Marcello & Yu, Haihan & Zhukova, Vita, 2016. "Cognitive (ir)reflection: New experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 81-93.
    3. repec:cup:judgdm:v:14:y:2019:i:3:p:234-279 is not listed on IDEAS

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    More about this item

    Keywords

    intertemporal decisions; time preferences; social preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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