Procedures for eliciting time preferences

David Freeman, Paola Manzini, Marco Mariotti, Luigi Mittone

    Research output: Working paperDiscussion paper

    Abstract

    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.
    Original languageEnglish
    Place of PublicationSt Andrews
    PublisherUniversity of St Andrews
    Pages1-29
    Number of pages29
    Publication statusPublished - 20 Oct 2015

    Publication series

    NameSchool of Economics & Finance Discussion Paper
    PublisherUniversity of St Andrews
    No.1513
    ISSN (Print)0962-4031
    ISSN (Electronic)2055-303X

    Keywords

    • Time preferences
    • elicitation methods
    • Becker-DeGroot-Marschak procedure
    • auctions
    • multiple price list

    Fingerprint

    Dive into the research topics of 'Procedures for eliciting time preferences'. Together they form a unique fingerprint.

    Cite this