Confounding in Intertemporal Choice Designs: New Sampling Methods for Exponential, Arithmetic, and Hyperbolic Discounting

36 Pages Posted: 15 Jul 2010

See all articles by John R. Doyle

John R. Doyle

Cardiff University - Cardiff Business School

Catherine Huirong Chen

Middlesex University Business School

Krishna Savani

Nanyang Business School

Date Written: July 13, 2010

Abstract

We examine the confounding between models of intertemporal choice. Critical outputs from hyperbolic, exponential and arithmetic discounting are all highly multicolinear in commonly used research designs. This confounding means that if one model defines a participant as impulsive, they all will: not because the models are intrinsically related, but for lack of design in the stimuli to detect their differences. Also, confounding makes it difficult to detect which model(s) people actually use, and in what circumstances. We develop methods to overcome the problem, and provide extensive tables of over 8,000 choice questions generated according to these principles, so that the degree of separation between models can be controlled. Researchers may copy and paste the questions out of the .pdf into Word, say, for further processing. We give instructions how best to sample the database of questions and/or construct alternative sampling designs.

Note, pages 26-36 inclusive are data to be copied and pasted rather than printed. They consist of several thousand comma separated numbers, formatted very densely like microfiche.

Keywords: Intertemporal choice, confounding, sampling, delay discounting, time preference, behavioral finance

JEL Classification: D90, C90, C91

Suggested Citation

Doyle, John and Chen, Catherine Huirong and Savani, Krishna, Confounding in Intertemporal Choice Designs: New Sampling Methods for Exponential, Arithmetic, and Hyperbolic Discounting (July 13, 2010). Available at SSRN: https://ssrn.com/abstract=1639544 or http://dx.doi.org/10.2139/ssrn.1639544

John Doyle (Contact Author)

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

HOME PAGE: http://www.cardiff.ac.uk/carbs/faculty/doylejr/index.html

Catherine Huirong Chen

Middlesex University Business School ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Krishna Savani

Nanyang Business School ( email )

Singapore, 639798
Singapore

HOME PAGE: http://www.krishnasavani.com

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