Procedures for eliciting time preferences
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We study three procedures to elicit attitudes towards delayed payments: the Becker-DeGroot-Marschak procedure; the second price auction; and the multiple price list. The payment mechanisms associated with these methods are widely considered as incentive compatible, thus if preferences satisfy Procedure Invariance, which is also widely (and often implicitly) assumed, they should yield identical time preference distributions. We find instead that the monetary discount rates elicited using the Becker-DeGroot-Marschak procedure are significantly lower than those elicited with a multiple price list. We show that the behavior we observe is consistent with an existing psychological explanation of preference reversals.
Freeman , D , Manzini , P , Mariotti , M & Mittone , L 2016 , ' Procedures for eliciting time preferences ' Journal of Economic Behavior and Organization , vol 126 , no. A , pp. 235–242 . DOI: 10.1016/j.jebo.2016.03.017
Journal of Economic Behavior and Organization
© 2016, Elsevier B.V. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://dx.doi.org/10.1016/j.jebo.2016.03.017
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