Present bias and collective dynamic choice in the lab?

Matthew O. Jackson, Leeat Yariv

Research output: Contribution to journalArticle

24 Scopus citations

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 languageEnglish (US)
Pages (from-to)4104-4146
Number of pages43
JournalAmerican Economic Review
Volume104
Issue number12
DOIs
StatePublished - Dec 1 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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