Working Paper: NBER ID: w22455
Authors: Jonathan D. Cohen; Keith Marzilli Ericson; David Laibson; John Myles White
Abstract: We review research that measures time preferences—i.e., preferences over intertemporal tradeoffs. We distinguish between studies using financial flows, which we call “money earlier or later” (MEL) decisions and studies that use time-dated consumption/effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences.
Keywords: No keywords provided
JEL Codes: D03; D9
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| monetary rewards (M52) | time preferences (D15) |
| MEL experiments (C99) | discount rates (E43) |
| psychological biases (D91) | choices in MEL experiments (C99) |
| contextual influences (D91) | choices in MEL experiments (C99) |
| MEL studies (C90) | predictive power of time preferences (D15) |
| MEL framework (C51) | understanding of time preferences (D15) |