Choice Over Time

37 Pages Posted: 6 Sep 2007

See all articles by Paola Manzini

Paola Manzini

University of St. Andrews - School of Economics and Finance; Institute for the Study of Labor (IZA)

Marco Mariotti

University of London - School of Economics and Finance

Date Written: August 2007

Abstract

In the last twenty years a growing body of experimental evidence has posed a challenge to the standard Exponential Discounting Model of choice over time. Attention has focused on some specific 'anomalies', notably preference reversal and declining discount rates, leading to the formulation of the model of hyperbolic discounting which is finding increasing favour in the literature. In this paper we provide a survey of both the theoretical modelling and the experimental evidence relating to choice over time. As we will show, a careful analysis of the mapping between theoretical models and experimental investigations raises questions as to whether some of the most focused upon anomalies should be indeed classified as such, or whether they are really the most challenging ones for conventional theory. New developments are emerging both at the theoretical and empirical level, opening up new exciting avenues for investigation.

Keywords: time preference, choice over time, theory, experiments

JEL Classification: C91, D9

Suggested Citation

Manzini, Paola and Mariotti, Marco, Choice Over Time (August 2007). IZA Discussion Paper No. 2993. Available at SSRN: https://ssrn.com/abstract=1012547

Paola Manzini

University of St. Andrews - School of Economics and Finance ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

HOME PAGE: http://www.st-andrews.ac.uk/~pm210/

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Marco Mariotti (Contact Author)

University of London - School of Economics and Finance ( email )

Mile End Road
London, E1 4NS
United Kingdom

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