Revealed Time-Preference

Paweł Dziewulski

University of Oxford - Department of Economics

June 11, 2014

Consider an experiment in which subjects are asked to choose between pairs consisting of a monetary payment and a time-delay at which the payment is delivered. Given a finite set of observations, under what conditions the choices of an individual agent can be rationalised by a discounted utility function? We develop an axiomatic characterisation of time-preference with various forms of discounting, including weakly present-biased, quasi-hyperbolic, and exponential, and determine the testable restrictions for each specification. Moreover, we discuss identification issues which may arise in this class of experiments.

Number of Pages in PDF File: 36

Keywords: revealed preference, testable restrictions, rationalisation, time-preference, discounted utility

JEL Classification: C14, C60, C61, D11, D12

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Date posted: June 12, 2014  

Suggested Citation

Dziewulski, Paweł, Revealed Time-Preference (June 11, 2014). Available at SSRN: http://ssrn.com/abstract=2448695 or http://dx.doi.org/10.2139/ssrn.2448695

Contact Information

Paweł Dziewulski (Contact Author)
University of Oxford - Department of Economics ( email )
Manor Road Building
Manor Road
Oxford, OX1 3UQ
United Kingdom
HOME PAGE: http://users.ox.ac.uk/~shil3804/
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