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Intertemporal Choice Experiments and Large-Stakes Behavior

Author

Listed:
  • Diego Aycinena

    (Department of Economics, Universidad del Rosario
    Economic Science Institute, Chapman University)

  • Szabolcs Blazsek

    (Escuela de Negocios, Universidad Francisco Marroqu´ın)

  • Lucas Rentschler

    (Department of Economics and Finance, Utah State University
    lucas.rentschler@usu.edu)

  • Charles Sprenger

    (California Institute of Technology
    sprenger@caltech.edu)

Abstract
Intertemporal choice experiments are increasingly implemented to make inference about discounting and marginal utility, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a decision on the desire to smooth a large-stakes payment — around 10% of annual income — through time. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are closely predicted by experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of such experimentally elicited measures of discounting and marginal utility for a large-stakes decision.

Suggested Citation

  • Diego Aycinena & Szabolcs Blazsek & Lucas Rentschler & Charles Sprenger, 2020. "Intertemporal Choice Experiments and Large-Stakes Behavior," Working Papers 20-36, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:20-36
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    File URL: https://digitalcommons.chapman.edu/esi_working_papers/331/
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    References listed on IDEAS

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    2. James Andreoni & Christina Gravert & Michael A. Kuhn & Silvia Saccardo & Yang Yang, 2018. "Arbitrage Or Narrow Bracketing? On Using Money to Measure Intertemporal Preferences," NBER Working Papers 25232, National Bureau of Economic Research, Inc.
    3. David J. Freeman & Kevin Laughren, 2024. "Task completion without commitment," Experimental Economics, Springer;Economic Science Association, vol. 27(2), pages 273-298, April.

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    More about this item

    Keywords

    Structural estimation; Out-of-sample prediction; Discounting; Convex Time Budget;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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