(Im)patience by Proxy: Making Intertemporal Decisions for Others

Decisions with consequences that play out over time are ubiquitous in business, policy, and family relations, and frequently the agent making these decisions is distinct from those who bear the consequences. We use a lab experiment to examine whether individuals make different intertemporal decisions for others of varying social distance than for themselves. Subjects make a series of intertemporal work time allocation decisions for themselves and for another individual, either a friend or a stranger. We find that people choose more impatiently (moving more disutility cost into the future) for others than for themselves. In other words, a decision made for you by proxy is more impatient than a decision you would make for yourself and thus is probably suboptimal. This result contrasts with some of the literature. This divergence may be because, as we find in a separate survey, people perceive procrastination of tasks as qualitatively different from other discounting decisions. Survey evidence suggests that individuals believe that they are more patient than other subjects, suggesting that these too-impatient decisions are made for others out of benevolence with a mistaken belief that the other is relatively impatient. Further, when the decision-maker sees information about how patient the recipient believes herself to be, this bias of excessively impatient decisions disappears, particularly when the recipient is a friend. Taken together, our results show that given limited information, proxy decision-makers choose more impatiently (pushing more costs into the future) than agents would prefer, but information mitigates this suboptimal choice. Our results also suggest that intertemporal choice over time is not behaviorally the same as over money.