Abstract
This study experimentally tests our proposed extended present bias hypothesis—discount factor increases over the proximate future and eventually approaches constancy, but remains distinct from unity in the remote future. Using front-end delay and a post-dated check for payment, discount factors are elicited for three seven-day durations: between 2 and 9 days later (proximate), between 31 and 38 days later (intermediate), and between 301 versus 308 days later (remote). We find support for diminishing discounting between the proximate and intermediate comparisons, but not between the intermediate and the remote comparisons. The findings validate our extended present bias hypothesis.
Original language | English (US) |
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Pages (from-to) | 151-165 |
Number of pages | 15 |
Journal | Theory and Decision |
Volume | 79 |
Issue number | 1 |
DOIs | |
State | Published - Jul 25 2015 |
Keywords
- Experimental economics
- Hyperbolic discounting
- Present bias
- Time consistency
ASJC Scopus subject areas
- General Decision Sciences
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Applied Psychology
- General Social Sciences
- Economics, Econometrics and Finance(all)
- Computer Science Applications