Procedures for eliciting time preferences

David Freeman; Paola Manzini; Marco Mariotti; Luigi Mittone

doi:10.1016/j.jebo.2016.03.017

Procedures for eliciting time preferences

David Freeman, Paola Manzini, Marco Mariotti, Luigi Mittone

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	235–242
Journal	Journal of Economic Behavior and Organization
Volume	126
Issue number	A
Early online date	24 Mar 2016
DOIs	https://doi.org/10.1016/j.jebo.2016.03.017
Publication status	Published - Jun 2016

Keywords

Time preferences
Elicitation methods
Becker-DeGroot-Marschak procedure
Auctions
Multiple price list

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10.1016/j.jebo.2016.03.017

elicitationoftimepreferencesElsevier
© 2016, Elsevier B.V. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://dx.doi.org/10.1016/j.jebo.2016.03.017
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1 Discussion paper

Procedures for eliciting time preferences
Freeman, D., Manzini, P., Mariotti, M. & Mittone, L., 20 Oct 2015, St Andrews: University of St Andrews, p. 1-29, 29 p. (School of Economics & Finance Discussion Paper; no. 1513).
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KW - Time preferences

KW - Elicitation methods

KW - Becker-DeGroot-Marschak procedure

KW - Auctions

KW - Multiple price list

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DO - 10.1016/j.jebo.2016.03.017

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SP - 235

EP - 242

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

IS - A

ER -

Procedures for eliciting time preferences

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Keywords

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Procedures for eliciting time preferences

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