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Published December 2014 | Published + Supplemental Material
Journal Article Open

Present Bias and Collective Dynamic Choice in the Lab

Abstract

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, utilitarian aggregation necessitates a present bias. In lab experiments three quarters of "social planners" exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of distributional concerns.

Additional Information

© 2014 American Economic Association. We thank Nageeb Ali, Sandro Ambuehl, James Andreoni, Kenneth Arrow, Mariagiovanna Baccara, Miguel Angel Ballester, Douglas Bernheim, Martin Browning, Christopher Chambers, Jeff Ely, Keith Ericson, Drew Fudenberg, Jerry Green, Olivier l'Haridon, Andrew Hertzberg, Julian Jamison, Lauren Merrill, Jochen Mierau, Massimo Morelli, Efe Ok, Andrew Postlewaite, Antonio Rangel, Ariel Rubinstein, Erik Snowberg, and Tomasz Strzalecki for useful discussions and comments. We also thank the anonymous referees for helpful suggestions. Jan Zapal provided us with superb research assistance. We gratefully acknowledge financial support from the National Science Foundation (SES 0551014 and SES 0961481) and the Gordon and Betty Moore Foundation. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper.

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Published - aer.104.12.4184.pdf

Supplemental Material - 20111429_data.zip

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August 20, 2023
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