Collective Intertemporal Decisions and Heterogeneity in Groups

39 Pages Posted: 21 Jul 2019 Last revised: 23 Jul 2019

See all articles by Daniela Glätzle-Rützle

Daniela Glätzle-Rützle

University of Innsbruck - Department of Public Finance

Philipp Lergetporer

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Date Written: 2019

Abstract

Many important intertemporal decisions, such as investments of firms or households, are made by groups rather than individuals. Little is known what happens to such collective decisions when group members have different incentives for waiting, because the economics literature on group decision making has, so far, assumed homogeneity within groups. In a lab experiment, we study the causal effect of group members' heterogeneous payoffs from waiting on intertemporal choices. We find that three-person groups behave more patiently than individuals and that this effect is driven by the presence of at least one group member with a high payoff from waiting. We present group chat content, survey data, and additional treatments to uncover the mechanism through which heterogeneity in groups increases patience.

Keywords: patience, time preferences, group decisions, payoff heterogeneity, experiment

JEL Classification: C910, C920, D030, D900

Suggested Citation

Glätzle-Rützle, Daniela and Lergetporer, Philipp and Sutter, Matthias, Collective Intertemporal Decisions and Heterogeneity in Groups (2019). CESifo Working Paper No. 7716, Available at SSRN: https://ssrn.com/abstract=3420585

Daniela Glätzle-Rützle (Contact Author)

University of Innsbruck - Department of Public Finance ( email )

Innrain 52
Innsbruck, 6020
Austria

Philipp Lergetporer

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Dresden Branch
Einsteinstraße 3
Dresden, 01069
Germany

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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