Abstract
We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, utilitarian aggregation necessitates a present bias. In lab experiments three quarters of "social planners" exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of distributional concerns.
Original language | English (US) |
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Pages (from-to) | 4104-4146 |
Number of pages | 43 |
Journal | American Economic Review |
Volume | 104 |
Issue number | 12 |
DOIs | |
State | Published - Dec 1 2014 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics