Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245641 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14590
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study time preferences by means of a longitudinal lab experiment involving both monetary and non-monetary rewards (leisure). Our novel design allows to measure whether participants prefer to anticipate or delay gratification, without imposing any structural assumption on the instantaneous utility, intertemporal utility or the discounting functions. We find that most people prefer to anticipate monetary rewards (positive time preferences for money), but they delay non-monetary rewards (negative time preferences for leisure). These results cannot be explained by personal timetables and heterogeneous preferences only. They invite to reconsider the psychological interpretation of the discount factor, and suggest that the assumption that discounting is consistent across domains can lead to non-negligible prediction errors in models involving non-monetary decisions, such as labor supply models.
Subjects: 
consistency across domains
negative discounting
laboratory experiment
non-monetary rewards
JEL: 
C91
D01
D91
J22
Document Type: 
Working Paper

Files in This Item:
File
Size
868.03 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.