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How Far Ahead Do People Plan?

Author

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  • John Hey
  • Julia Knoll

Abstract

We report on a simple experiment which enables us to infer how far people plan ahead when taking decisions in a dynamic risky context. Usually economic theory assumes that people plan right to the end of the planning horizon. We find that this is true for a little over half of the subjects in the experiment, while a little under one half seem not to plan ahead at all.

Suggested Citation

  • John Hey & Julia Knoll, 2006. "How Far Ahead Do People Plan?," Discussion Papers 06/17, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:06/17
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    References listed on IDEAS

    as
    1. Enrica Carbone & John Hey, 2001. "A Test of the Principle of Optimality," Theory and Decision, Springer, vol. 50(3), pages 263-281, May.
    2. John D. Hey, 2002. "Experimental Economics and the Theory of Decision Making Under Risk and Uncertainty," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 27(1), pages 5-21, June.
    3. John D. Bone & John D. Hey & John R. Suckling, 2003. "Do people plan ahead?," Applied Economics Letters, Taylor & Francis Journals, vol. 10(5), pages 277-280, April.
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    Citations

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    Cited by:

    1. Ariane Lambert-Mogiliansky & Jerome Busemeyer, 2012. "Quantum Type Indeterminacy in Dynamic Decision-Making: Self-Control through Identity Management," Games, MDPI, vol. 3(2), pages 1-22, May.
    2. Masiliūnas, Aidas, 2019. "Overcoming inefficient lock-in in coordination games with sophisticated and myopic players," Mathematical Social Sciences, Elsevier, vol. 100(C), pages 1-12.
    3. Rydval, Ondrej & Ortmann, Andreas & Ostatnicky, Michal, 2009. "Three very simple games and what it takes to solve them," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 589-601, October.
    4. Christian Lukas & Jens Robert Schöndube, 2008. "Trust and Adaptive Learning in Implicit Contracts," FEMM Working Papers 08017, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    5. Quemin, Simon & Trotignon, Raphaël, 2021. "Emissions trading with rolling horizons," Journal of Economic Dynamics and Control, Elsevier, vol. 125(C).
    6. Darryl Seale & William Stein & Amnon Rapoport, 2014. "Hold or roll: reaching the goal in jeopardy race games," Theory and Decision, Springer, vol. 76(3), pages 419-450, March.
    7. Vincent Anesi & Philippe De Donder, 2011. "Secondary issues and party politics: an application to environmental policy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(3), pages 519-546, April.
    8. Maria J. Ruiz Martos, 2017. "Individual Dynamic Choice Behaviour and the Common Consequence Effect," ThE Papers 17/01, Department of Economic Theory and Economic History of the University of Granada..
    9. Spiro, Daniel, 2014. "Resource prices and planning horizons," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 159-175.
    10. Pradiptyo, Rimawan & Sahadewo, Gumilang Aryo, 2012. "On The Complexity of Eliminating Fuel Subsidy in Indonesia; A Behavioral Approach," MPRA Paper 40045, University Library of Munich, Germany.

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    More about this item

    Keywords

    Planning; dominance; myopia; naivety; sophistication;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

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