Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141616
Authors: 
Freeman, David
Manzini, Paola
Mariotti, Marco
Mittone, Luigi
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9857
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.
Subjects: 
time preferences
elicitation methods
Becker-DeGroot-Marschak procedure
auctions
multiple price list
JEL: 
C91
D9
Document Type: 
Working Paper

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