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Do Couples Discount Future Consequences Less than Individuals?

Author

Listed:
  • Mohammed Abdellaoui

    (HEC-Paris & GREGHEC-CNRS, France)

  • Olivier l'Haridon

    (CREM CNRS UMR 6211, University of Rennes 1, France)

  • Corina Paraschiv

    (HEC-Paris & GREGHEC-CNRS, France)

Abstract

This paper examines couple time preferences by reporting the results of an ex- periment based on the elicitation of nearest equivalent values. Decisions involving delayed outcomes are studied for each of the two partners individually and for the couple. This allows for a direct comparison between couple behavior and individual partners’ behavior in choices over time. We use Fishburn and Rubinstein’s (1982) discounted utility model and infer measurements of utility and discounting at both the individual and the couple level. While utility is found to be similar for cou- ples and individuals, we observe that, in decision over time, couples discount future amounts of money less than individuals. This result suggests that making joint decisions significantly reduces revealed impatience. Moreover, we show that cou- ple time preferences cannot be considered as a mix of the individual preferences of each of the two partners. Taken together, these findings suggest that determinants of intertemporal decisions made by couples, such as financial decisions, should be considered as distinct from determinants of individual decisions.

Suggested Citation

  • Mohammed Abdellaoui & Olivier l'Haridon & Corina Paraschiv, 2013. "Do Couples Discount Future Consequences Less than Individuals?," Economics Working Paper Archive (University of Rennes & University of Caen) 201320, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:201320
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    References listed on IDEAS

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    Cited by:

    1. Hideo Akabayashi & Akiko Kamesaka & Ryosuke Nakamura & Masao Ogaki & Teruyuki Tamura, 2014. "An Experimental Study of Intergenerational Altruism with Parent-Child Pairs," Keio-IES Discussion Paper Series 2014-005, Institute for Economics Studies, Keio University.
    2. Laurent Denant-Boemont & Enrico Diecidue & Olivier l’Haridon, 2017. "Patience and time consistency in collective decisions," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 181-208, March.
    3. Giovanni Ponti & Ismael Rodríguez Lara & Daniela Di Cagno, 2014. "Doing it now or later with payoff externalities: Experimental evidence on social time preferences," Working Papers. Serie AD 2014-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    4. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.
    5. Rodriguez-Lara, Ismael & Ponti, Giovanni, 2017. "Social motives vs social influence: An experiment on interdependent time preferences," Games and Economic Behavior, Elsevier, vol. 105(C), pages 177-194.
    6. Rodriguez-Lara, Ismael & Ponti, Giovanni, 2017. "Social Motives vs Social Influence: an Experiment on Time Preferences," MPRA Paper 76486, University Library of Munich, Germany.
    7. Rong, Rong & Gnagey, Matthew & Grijalva, Therese, 2018. "“The less you Discount, the more it shows you really care”: Interpersonal discounting in households," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 1-23.

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    Keywords

    Household decision-making; time preferences; hyperbolic discounting;
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