Working Over Time: Dynamic Inconsistency in Real Effort Tasks

48 Pages Posted: 26 Jan 2013

See all articles by Ned Augenblick

Ned Augenblick

University of California, Berkeley - Economic Analysis & Policy Group

Muriel Niederle

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Charles Sprenger

Stanford University - Department of Economics

Date Written: January 2013

Abstract

Experimental tests of dynamically inconsistent time preferences have largely relied on choices over time-dated monetary rewards. Several recent studies have failed to find the standard patterns of time inconsistency. However, such monetary studies contain often discussed confounds. In this paper, we sidestep these confounds and investigate choices over consumption (real effort) in a longitudinal experiment. We pair those effort choices with a companion monetary discounting study. We confirm very limited time inconsistency in monetary choices. However, subjects show considerably more present bias in effort. Furthermore, present bias in the allocation of work has predictive power for demand of a meaningfully binding commitment device. Therefore our findings validate a key implication of models of dynamic inconsistency, with corresponding policy implications.

Suggested Citation

Augenblick, Ned and Niederle, Muriel and Sprenger, Charles, Working Over Time: Dynamic Inconsistency in Real Effort Tasks (January 2013). NBER Working Paper No. w18734. Available at SSRN: https://ssrn.com/abstract=2207269

Ned Augenblick (Contact Author)

University of California, Berkeley - Economic Analysis & Policy Group ( email )

Berkeley, CA 94720
United States

Muriel Niederle

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Charles Sprenger

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

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