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Can intertemporal choice experiments elicit time preferences for consumption?

Published online by Cambridge University Press:  14 March 2025

Robin P. Cubitt  and
Daniel Read
Robin P. Cubitt*
Affiliation:
School of Economics, Sir Clive Granger Building, University Park, University of Nottingham, Nottingham, NG7 2RD, UK
Daniel Read*
Affiliation:
Durham Business School, University of Durham, Mill Hill Lane, Durham, DH1 3LB, UK
*
e-mail: [email protected]
e-mail: [email protected]
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Abstract

The paper considers what can be inferred about experimental subjects’ time preferences for consumption from responses to laboratory tasks involving tradeoffs between sums of money at different dates, if subjects can reschedule consumption spending relative to income in external capital markets. It distinguishes three approaches identifiable in the literature: the straightforward view; the separation view; and the censored data view. It shows that none of these is fully satisfactory and discusses the resulting implications for intertemporal decision-making experiments.

Keywords

Discount ratesElicitation of time preferencesIntertemporal decision-making experiments

JEL classification

D12: Consumer Economics: Empirical Analysis D11: Consumer Economics: Theory C91: Laboratory, Individual Behavior D90: General‡ C90: General D91: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Type
Research Article
Information
Experimental Economics , Volume 10 , Issue 4 , December 2007 , pp. 369 - 389
Copyright
Copyright © 2007 Economic Science Association

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