A case of framing effects: the elicitation of time preferences

Paola Manzini, Marco Mariotti

    Research output: Working paperDiscussion paper

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    Abstract

    We compare three methods for the elicitation of time preferences in an experimental setting: the Becker-DeGroot-Marschak procedure (BDM); the second price auction; and the multiple price list format. The first two methods have been used rarely to elicit time preferences. All methods used are perfectly equivalent from a decision theoretic point of view, and they should induce the same `truthful' revelation i dominant strategies. In spite of this, we find that framing does matter: the money discount rates elicited with the multiple price list tend to be higher than those elicited with the other two methods. In addition, our results shed some light on attitudes towards time, and they permit a broad classification of subjects depending on how the size of the elicited values varies with the time horizon.
    Original languageEnglish
    Place of PublicationSt Andrews
    PublisherUniversity of St Andrews
    Pages1-48
    Number of pages49
    Publication statusPublished - 21 Jul 2014

    Publication series

    NameSchool of Economics & Finance Discussion Paper
    No.1405
    ISSN (Print)0962-4031
    ISSN (Electronic)2055-303X

    Keywords

    • Time preferences
    • Elicitation methods
    • BDM
    • Auctions
    • MPL

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