Survey of Time Preference, Delay Discounting Models

Doyle, John R.

doi:10.2139/ssrn.1685861

Cited by 110 publications

(138 citation statements)

References 75 publications

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“…A variety of theories, models, and mechanisms have been proposed to explain why human decision makers discount future outcomes and, in particular, why we tend to be so impatient (e.g., Doyle 2013, Frederick et al 2002, Read 2004, Soman et al 2005, Urminsky and Zauberman 2014. Yet, to the best of our knowledge, none of these accounts have incorporated the mechanism examined in this paper: an Downloaded from informs.org by [137.205.202.97] on 25 April 2017, at 04:18 .…”

Section: Theoretical Links and Policy Applicationsmentioning

confidence: 99%

The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making

2017

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T his paper proposes a novel account of impatience: People pay more attention to the opportunity costs of choosing larger, later rewards than to the opportunity costs of choosing smaller, sooner ones. Eight studies show that when the opportunity costs of choosing smaller, sooner rewards are subtly highlighted, people become more patient, whereas when the opportunity costs of choosing larger, later rewards are highlighted this has no effect. This pattern is robust to variations in the choice task, to the participant population, and to whether the choices are incentivized or hypothetical. We argue that people are naturally aware of the opportunity costs of delayed rewards but pay less attention to those associated with smaller, sooner ones. We conclude by discussing implications for theory and policy.Data, as supplemental material, are available at https://doi

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Section: Theoretical Links and Policy Applicationsmentioning

confidence: 99%

The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making

2017

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“…Luhmann, 2013), the 1-parameter hyperbolic model is simple and provides a good account of discounting in human (McKerchar et al, 2009) and non-human animals (Freeman et al, 2009). Second, a comparison of 4 prominent models shows clear superiority for the 1-parameter hyperbolic over a 1-parameter exponential model, but there is no clear rationale for placing attention on one of the more complex discount functions (McKerchar et al, 2009;Doyle, 2013).…”

Section: Choice Of the 1-parameter Discount Functionmentioning

confidence: 99%

Hierarchical Bayesian estimation and hypothesis testing for delay discounting tasks

Vincent

2015

Behav Res

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A state-of-the-art data analysis procedure is presented to conduct hierarchical Bayesian inference and hypothesis testing on delay discounting data. The delay discounting task is a key experimental paradigm used across a wide range of disciplines from economics, cognitive science, and neuroscience, all of which seek to understand how humans or animals trade off the immediacy verses the magnitude of a reward. Bayesian estimation allows rich inferences to be drawn, along with measures of confidence, based upon limited and noisy behavioural data. Hierarchical modelling allows more precise inferences to be made, thus using sometimes expensive or difficult to obtain data in the most efficient way. The proposed probabilistic generative model describes how participants compare the present subjective value of reward choices on a trial-to-trial basis, estimates participant-and group-level parameters. We infer discount rate as a function of reward size, allowing the magnitude effect to be measured. Demonstrations are provided to show how this analysis approach can aid hypothesis testing. The analysis is demonstrated on data from the popular 27-item monetary choice questionnaire (Kirby, 2009), but will accept data from a range of protocols, including adaptive procedures. The software is made freely available to researchers.Keywords Decision making · Delay discounting · Intertemporal choice · magnitude effect · Time preference · Bayesian estimation · MCMC · Financial psychophysics The analysis code is freely downloadable from https://github. com/drbenvincent/delay-discounting-analysis.

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“…R t is the discount factor for year t and r is the annual saving interest rate; the definition of R t represents the standard method of delay discounting by valuing a future cash flow in terms of its net present value (Doyle 2013). I is the initial investment cost of the ZT drill and GM t is the gross margin, i.e., the annual service provision revenue minus variable costs.…”

Section: Methodological Approachmentioning

confidence: 99%

Growing the service economy for sustainable wheat intensification in the Eastern Indo-Gangetic Plains: lessons from custom hiring services for zero-tillage

2016

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Zero-tillage (ZT) is a proven technology for enhancing wheat productivity and, hence, food security in the Indo-Gangetic Plains, while reducing production costs. However, very few farmers possess their own tractors much less the specialized seed drills required to implement the technology. As a consequence, adoption of ZT largely hinges on affordable access to custom hire services. In Eastern India, the service economy for ZT is expanding, but remains in the early stages of growth. ZT service businesses remain largely uncharacterized, and related business dynamics poorly understood. To address this knowledge gap and derive recommendations for an efficient targeting of public sector support for those service providers (SPs) who are poised for growth, we identified factors that influence ZT entrepreneurship, encompassing new business formation and the resulting scale of the enterprise. We used data from a census of 270 ZT SPs in Bihar, as documented by the Cereal Systems Initiative for South Asia (CSISA). To identify determinants of engaging in ZT service provision, the data were pooled with those of 1000 randomly-selected wheat farmers located in the same districts. We applied Heckman's two-step estimation procedure to derive unbiased estimates of determinants of the scale of the ZT service businesses. ZT SPs are generally larger, tractor-owning farmers who have taken up service provision as a side business since 2010 or later. Only 8.3 % of the surveyed farm households owned a tractor, demonstrating the importance of service provision for accessing ZT and other mechanization technologies. ZT SPs expanded their businesses considerably from 2011 to 2012 to an average total of 20 clients and 50 ha serviced per SP. However, larger areas were primarily achieved by servicing larger client farms. Welleducated farmers with larger land holdings and extensive social networks are most likely to become ZT SPs. However, among this stratum, the relatively smaller scale farmers were most likely to provide services at a sizeable scale. To efficiently accelerate the spread of ZT technology, we conclude that these smaller-scale tractor-owning farmers are the most sensible targets for purchase subsidies on ZT drills as well as the primary audience for business development training. Since a considerable fraction of the ZT area expansion resulted from service provision to larger client farms, there is a need to develop business models that enhance the social inclusiveness of ZT services by reducing the transaction costs of reaching smallholders.

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Survey of Time Preference, Delay Discounting Models

Cited by 110 publications

References 75 publications

The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making

The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making

Hierarchical Bayesian estimation and hypothesis testing for delay discounting tasks

Growing the service economy for sustainable wheat intensification in the Eastern Indo-Gangetic Plains: lessons from custom hiring services for zero-tillage

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