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(Im)patience by Proxy: Making Intertemporal Decisions for Others

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Abstract
Decisions with consequences that play out over time are ubiquitous in business, policy, and family relations, and frequently the agent making such a decision is not the one who bears the consequences. We use a lab experiment to examine whether individuals make different intertemporal decisions for others of varying social distance than for themselves. Subjects make a series of intertemporal work time allocation decisions for themselves and for another individual, either a friend or a stranger. We find that if they do not receive information about the decision recipient, people choose more impatiently (moving more disutility cost into the future) for others than for themselves. In other words, a decision made for you by an uninformed proxy is more impatient than a decision you would make for yourself and thus is probably suboptimal. This result contrasts with some of the literature, a divergence that may be because most of those studies are in the benefit domain while ours is in the cost domain and because (as we find in a separate survey) people perceive procrastination as qualitatively different from other discounting decisions. We provide evidence that this bias in proxy decisions exists because benevolent decision-makers believe their decision recipients to be more impatient than they actually are. First, survey evidence suggests that uninformed individuals believe that they are more patient than other subjects. Second, when the decision-maker sees information about how patient the recipient believes herself to be, this impatience bias disappears if the recipient is a friend. Taken together, our results show that given limited information, proxy decision-makers choose more impatiently than principals would prefer, but information can mitigate this suboptimal choice if social distance is low. Our results also suggest that intertemporal choice may not be behaviorally the same over time as over money.

Suggested Citation

  • Angela C.M. de Oliveira & Sarah Jacobson, 2020. "(Im)patience by Proxy: Making Intertemporal Decisions for Others," Department of Economics Working Papers 2020-02, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2020-02
    Note: This is an update of working paper 2017-01
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    Cited by:

    1. Ifcher, John & Zarghamee, Homa, 2020. "Behavioral economic phenomena in decision-making for others," Journal of Economic Psychology, Elsevier, vol. 77(C).
    2. Lukas Kiessling & Shyamal Chowdhury & Hannah Schildberg-Hörisch & Matthias Sutter, 2021. "Parental Paternalism and Patience," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2021_03, Max Planck Institute for Research on Collective Goods.
    3. Rong Rong & Therese C. Grijalva & Jayson Lusk & W. Douglass Shaw, 2019. "Interpersonal discounting," Journal of Risk and Uncertainty, Springer, vol. 58(1), pages 17-42, February.
    4. Jones, Luke & Cseh, Attila, 2021. "Earning responsibility increases risk taking among representative decision makers," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 317-329.
    5. Felix Koelle & Lukas Wenner, 2018. "Present-Biased Generosity: Time Inconsistency across Individual and Social Contexts," Discussion Papers 2018-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    6. Ifcher, John & Zarghamee, Homa, 2020. "Do Nominations Close the Gender Gap in Competition?," IZA Discussion Papers 13852, Institute of Labor Economics (IZA).
    7. Kölle, Felix & Wenner, Lukas, 2019. "Time-Inconsistent Generosity: Present Bias across Individual and Social Contexts," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203505, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    proxy decision-making; intertemporal choice; laboratory experiment;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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