Intertemporal Choice Experiments and Large-Stakes Behavior

Translated title of the contribution: Intertemporal Choice Experiments and Large-Stakes Behavior

Diego Aycinena, Szabolcs Blazsek, Lucas Rentschler, Charles Sprenger

Research output: Working paper

Abstract

Intertemporal choice experiments are frequently implemented to make inference about time preferences, 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 experimentally elicited intertemporal preferences for large-stakes decisions.
Translated title of the contributionIntertemporal Choice Experiments and Large-Stakes Behavior
Original languageEnglish
Pages2-61
Number of pages61
StatePublished - Dec 1 2019

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