How to Measure Discount Rates? An Experimental Comparison of Three Methods

Hardisty, David J.; Fox-Glassman, Katherine T.; Krantz, David H.; Weber, Elke U.

doi:10.2139/ssrn.1961367

Cited by 32 publications

(66 citation statements)

References 24 publications

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“…This may affect participants' answers by restricting the range of response options and also by implicitly suggesting that high discount rates are normal and negative discount rates are extreme. Recent research comparing measurement methods has documented that scale choice systematically affects discount rates (Hardisty, Thompson, et al, ). Therefore, in Study 3, we tested a scale of response options that was symmetric around the default amount, with equal numbers of options implying negative discount rates and positive discount rates.…”

Section: Discussionmentioning

confidence: 99%

“…However, the sample size was small (“about twenty usable responses”, p. 203), and no measures of variability or statistical significance were reported (except to note that “there was wide variation among subjects”, p. 203), so this trend may not reliable. Perhaps more importantly, Thaler () elicited intertemporal indifference points using the matching method (i.e., “fill‐in‐the‐blank”), which has been found to frequently confuse participants in the domain of losses, sometimes yielding data that are opposite of what participants intend to convey (Hardisty, Thompson, Krantz, & Weber, ).…”

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confidence: 99%

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Good or Bad, We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Hardisty,

Appelt,

Weber

2012

Behavioral Decision Making

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Intertemporal tradeoffs are ubiquitous in decision making, yet preferences for current versus future losses are rarely explored in empirical research. Whereas rational‐economic theory posits that neither outcome sign (gains vs. losses) nor outcome magnitude (small vs. large) should affect delay discount rates, both do, and moreover, they interact: in three studies, we show that whereas large gains are discounted less than small gains, large losses are discounted more than small losses. This interaction can be understood through a reconceptualization of fixed‐cost present bias, which has traditionally described a psychological preference for immediate rewards. First, our results establish present bias for losses—a psychological preference to have losses over with now. Present bias thus predicts increased discounting of future gains but decreased (or even negative) discounting of future losses. Second, because present bias preferences do not scale with the magnitude of possible gains or losses, they play a larger role, relative to other motivations for discounting, for small magnitude intertemporal decisions than for large magnitude intertemporal decisions. Present bias thus predicts less discounting of large gains than small gains but more discounting of large losses than small losses. The present research is the first to demonstrate that the effect of outcome magnitude on discount rates may be opposite for gains and losses and also the first to offer a theory (an extension of present bias) and process data to explain this interaction. The results suggest that policy efforts to encourage future‐oriented choices should frame outcomes as large gains or small losses. Copyright © 2012 John Wiley & Sons, Ltd.

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Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%

Good or Bad, We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Hardisty,

Appelt,

Weber

2012

Behavioral Decision Making

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“…In essence, this method asks subjects to reveal directly the upper bracket of their indifference point. However, Hardisty et al (2013) note that choice-based measures, such as the fixed-sequence choice titration and the staircase choice titration, are better predictors of real world outcomes than matching tasks. Additionally, the authors point out that the demanding dynamic staircase titration offers no advantages over the simpler fixed-sequence choice titration, making the latter the most appropriate method for this experiment.…”

Section: Experimental Designmentioning

confidence: 99%

Time preferences and risk aversion: Tests on domain differences

Ioannou

Sadeh

2016

J Risk Uncertain

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Understanding how individuals discount and evaluate the risks of environmental outcomes is a prime component in designing effective environmental policy. We use an incentivized experimental design to investigate whether subjects' time preferences and risk aversion across the monetary and environmental domains differ. We find that subjects' time preferences are not significantly different across the two domains. In contrast, subjects exhibit a higher degree of risk aversion in the environmental domain. Furthermore, we corroborate earlier results, documenting that women are more risk averse than men in the monetary domain, and show this finding to also hold in the environmental domain.Keywords Risk and time · Discounting · Risk aversion · Domain differences · Environmental domainWe are grateful to Michael Vlassopoulos, Manos Mentzakis, Zacharias Maniadis and Daniel Read for their comments and suggestions. We would also like to thank

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“…Na zisťovanie časových preferencií a časovo nekonzistentných preferencií sa vo výskumoch používajú predovšetkým dva štandardné prístupy (Hardisty et al, 2013): 1. výber z množiny binárnych alternatív a identifi kovanie bodu "zlomu", resp. bodu indiferencie a 2. priame určenie bodu indiferencie.…”

Section: Metodika Skúmaniaunclassified

On inconsistency of time preferences of people from the marginalised roma communities

Želinský¹

2015

Politicka ekonomie

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NEKONZISTENTNOSŤ ČASOVÝCH PREFERENCIÍ ĽUDÍ Z MARGINALIZOVANÝCH RÓMSKYCH KOMUNÍT Tomáš Želinský, IES-FSV Univerzita Karlova v Praze a Technická univerzita v Košiciach  ÚvodNeoklasická ekonomická teória predpokladá, že ekonomické subjekty majú konzistentné časové preferencie, 1 tzn. rozhodnutie viažuce sa na deň v budúcnosti môže byť uskutočnené kedykoľvek pred uvedeným dňom bez toho, aby bolo potrebné ho prehodnotiť. Avšak podľa viacerých výskumov sú časové preferencie u časti populá-cie nekonzistentné, teda v čase dochádza k ich zmene (Herings a Rohde, 2006). Nekonzistentnosť (nielen časových) preferencií sa prejavuje v mnohých aspektoch ľudského správania. Typickým príkladom sú novoročné predsavzatia "Od zajtra začínam/prestávam...," no v prípade časti populácie príchodom ďalšieho dňa k naplneniu predsavzatia nedochádza a jednotlivec si sám (vnútorne) zdôvodňuje, prečo je potrebné naplnenie predsavzatia odložiť na neskorší termín. Avšak v prípade takejto osoby k jeho naplneniu nedôjde ani v neskoršom termíne. Zúžením problematiky nekonzistentných preferencií do časovej roviny sa dostávame k intertemporálnej voľbe ekonomických subjektov, teda k rozhodnutiam založeným na porovnávaní prínosov a strát v rôznych časových okamihoch. Otázkou intertemporálnej voľby sa ekonó-movia zaoberajú už od počiatku vzniku ekonómie ako vedy (zamýšľal sa nad ňou už Adam Smith 2 ), kedy bola táto voľba pokladaná predovšetkým za výsledok rôznych psychologických motívov (Frederick, Loewenstein a O'Donoghue, 2002).Cieľom tohto príspevku je analyzovať časové preferencie a časovo nekonzistentné preferencie chudobných ľudí žijúcich v marginalizovaných rómskych komunitách na Slovensku (ako jednej zo špecifi ckých skupín chudobných osôb) vo vzťahu k ich základným sociálno-ekonomickým a demografi ckým charakteristikám a konfrontovať výsledky s výsledkami iných autorov. Slovensko patrí medzi krajiny EÚ s najvyš-ším podielom rómskej populácie, ktorá je považovaná za skupinu ľudí s vysokým rizikom chudoby (Filadelfi ová, 2007), pričom medzi najohrozenejšie možno zaradiť práve Rómov žijúcich v marginalizovaných komunitách, kde dochádza k mnohoná-

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How to Measure Discount Rates? An Experimental Comparison of Three Methods

Cited by 32 publications

References 24 publications

Good or Bad, We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Good or Bad, We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Time preferences and risk aversion: Tests on domain differences

On inconsistency of time preferences of people from the marginalised roma communities

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