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How does the preference for increasing payments depend on the size and source of the payments?

Author

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  • Duffy, Sean
  • Smith, John
  • Woods, Kristin

Abstract

It is well-known that subjects can exhibit a preference for increasing payments. Smith (2009a) makes a related prediction that the difference between the preference increasing wage payments and the preference for increasing non-wage payments will be largest for intermediate payments. We find evidence consistent with this prediction. Consistent with previous experiments, we find that the preference for increasing payments is increasing in the size of the payments. Also consistent with the literature, we find that the preference for increasing wage payments is stronger than the preference for non-wage payments.

Suggested Citation

  • Duffy, Sean & Smith, John & Woods, Kristin, 2015. "How does the preference for increasing payments depend on the size and source of the payments?," MPRA Paper 64212, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64212
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    File URL: https://mpra.ub.uni-muenchen.de/64212/1/MPRA_paper_64212.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Bougherara, Douadia & Lapierre, Margaux & Préget, Raphaële & Sauquet, Alexandre, 2021. "Do farmers prefer increasing, decreasing, or stable payments in Agri-environmental schemes?," Ecological Economics, Elsevier, vol. 183(C).

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    More about this item

    Keywords

    time preference; sequences; intertemporal choice; economic psychology;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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