Document Type
Article
Publication Date
2014
Abstract
Several studies have shown that people greatly discount future bene ts and costs. However, most of the direct laboratory evidence of this phenomenon has focused on individual choice experiments. This paper investigates the degree to which the timing of payments a ects behavior in four commonly studies strategic settings: a Prisoner's Dilemma game, a Stag-Hunt game, a First Price Auction and a Second Price Auction. In all four settings, a two week delay in payo s has a comparable e ect to a 20% reduc- tion in current payo s. A follow-up study suggests that it is an individual's strategic response to the anticipated discount rate of others that might be driving this behavior rather than a participant's own discount factor.
Recommended Citation
Deck, C. and Jahedi, S. (2014). People do not discount heavily in strategic settings, but they believe others do. ESI Working Paper 14-11. Retrieved from http://digitalcommons.chapman.edu/esi_working_papers/15
Comments
Working Paper 14-11