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Title:Interpreting time horizon effects in inter-temporal choice PDF Logo
Authors:Dohmen, Thomas
Falk, Armin
Huffman, David
Sunde, Uwe
Issue Date:2012
Series/Report no.:CESifo working paper: Behavioural Economics 3750
Abstract:We compare different designs that have been used to test for an impact of time horizon on discounting, using real incentives and two representative data sets. With the most commonly used type of design we replicate the typical finding of declining (hyperbolic) discounting, but with other designs find constant or increasing discounting. As a whole, the data are not consistent with any of these usual candidate discounting assumptions, and they also imply a violation of transitivity. The results have implications for interpreting previous evidence, and pose an important puzzle for understanding inter-temporal choice.
Subjects:time preference
hyperbolic discounting
self-control
dynamic inconsistency
intransitivity
JEL:D01
D90
D03
E21
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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