Procedures for eliciting time preferences

Freeman, David, Manzini, Paola, Mariotti, Marco and Mittone, Luigi (2016) Procedures for eliciting time preferences. Journal of Economic Behavior and Organization, 126 (Part A). pp. 235-242. ISSN 0167-2681

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We study three procedures to elicit attitudes toward 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.

Item Type: Article
Keywords: Auctions,Becker-DeGroot-Marschak procedure,C91,D9,Elicitation methods,Multiple price list,Time preferences
Schools and Departments: University of Sussex Business School > Economics
Depositing User: Paola Manzini
Date Deposited: 07 Nov 2017 10:54
Last Modified: 02 Jul 2019 17:33

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