Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/235381
Authors: 
Dertwinkel-Kalt, Markus
Gerhardt, Holger
Riener, Gerhard
Schwerter, Frederik
Strang, Louis
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9011
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias”, the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects’ willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving monetary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings.
Subjects: 
attention
focusing
bounded rationality
intertemporal choice
future bias
present bias
framing
JEL: 
D01
Document Type: 
Working Paper

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