Document Type
Article
Publication Date
9-17-2020
Abstract
Intertemporal choice experiments are increasingly implemented to make inference about discounting and marginal utility, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a decision on the desire to smooth a large-stakes payment | around 10% of annual income | through time. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are closely predicted by experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of such experimentally elicited measures of discounting and marginal utility for a large-stakes decision.
Recommended Citation
Aycinena, D. Blazsek, S., E., Rentschler, L., & Sprenger, C. (2020). Intertemporal choice experiments and large-stakes behavior. https://digitalcommons.chapman.edu/esi_working_papers/331/
Comments
ESI Working Paper 20-36