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Revealed Time-Preference

36 Pages Posted: 12 Jun 2014  

Paweł Dziewulski

University of Oxford - Department of Economics

Date Written: June 11, 2014

Abstract

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.

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

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

Suggested Citation

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

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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