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Present Bias and Collective Dynamic Choice in the Lab

Jackson, Matthew O. and Yariv, Leeat (2014) Present Bias and Collective Dynamic Choice in the Lab. American Economic Review, 104 (12). pp. 4184-4204. ISSN 0002-8282. https://resolver.caltech.edu/CaltechAUTHORS:20150108-100808153

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Abstract

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, utilitarian aggregation necessitates a present bias. In lab experiments three quarters of "social planners" exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of distributional concerns.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1257/aer.104.12.4184 DOIArticle
https://www.aeaweb.org/articles.php?doi=10.1257/aer.104.12.4184PublisherArticle
ORCID:
AuthorORCID
Jackson, Matthew O.0000-0001-9846-4249
Additional Information:© 2014 American Economic Association. We thank Nageeb Ali, Sandro Ambuehl, James Andreoni, Kenneth Arrow, Mariagiovanna Baccara, Miguel Angel Ballester, Douglas Bernheim, Martin Browning, Christopher Chambers, Jeff Ely, Keith Ericson, Drew Fudenberg, Jerry Green, Olivier l’Haridon, Andrew Hertzberg, Julian Jamison, Lauren Merrill, Jochen Mierau, Massimo Morelli, Efe Ok, Andrew Postlewaite, Antonio Rangel, Ariel Rubinstein, Erik Snowberg, and Tomasz Strzalecki for useful discussions and comments. We also thank the anonymous referees for helpful suggestions. Jan Zapal provided us with superb research assistance. We gratefully acknowledge financial support from the National Science Foundation (SES 0551014 and SES 0961481) and the Gordon and Betty Moore Foundation. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper.
Funders:
Funding AgencyGrant Number
NSFSES 0551014
NSFSES 0961481
Gordon and Betty Moore FoundationUNSPECIFIED
Issue or Number:12
Classification Code:JEL: C91; D12; D71; D72
Record Number:CaltechAUTHORS:20150108-100808153
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20150108-100808153
Official Citation:Jackson, Matthew O., and Leeat Yariv. 2014. "Present Bias and Collective Dynamic Choice in the Lab." American Economic Review, 104(12): 4184-4204
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:53334
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:08 Jan 2015 22:05
Last Modified:03 Oct 2019 07:48

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