Present Bias and Collective Dynamic Choice in the Lab

Jackson, Matthew O.; Yariv, Leeat

doi:10.2139/ssrn.2161036

Cited by 28 publications

(49 citation statements)

References 58 publications

(4 reference statements)

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“…We show that this class of utility functions exhibits a particular sort of time inconsistency: present-bias, which matches some evidence on behavior. This generalizes a result in Jackson and Yariv (2014) that shows that utilitarian collective utility functions must be present-biased (as defined below).…”

Section: Separable Aggregation Of Preferences and Present-biassupporting

confidence: 79%

“…The last conclusion of the proposition then follows from Jackson and Yariv (2014), who show that a utilitarian collective utility function must either be dictatorial or present-biased.…”

Section: Also Such a V Is Necessarily Either Dictatorialmentioning

confidence: 82%

“…The second sentence of the proposition follows from Jackson and Yariv (2014), who show that weighted utilitarian collective utility functions that put positive weight on at least two individuals with differing discount factors are present-biased.…”

Section: Discussionmentioning

confidence: 99%

“…We show that whenever such rules respect unanimity, they correspond to a weighted sum of the individual agents' utility functions. Therefore, combined with results in Jackson and Yariv (2014), whenever non-dictatorial, these rules exhibit a specific form of time inconsistency: a present-bias, one of the leading time inconsistencies identified from lab and field data. 4 Our last results examine other methods of aggregating preferences: via some sort of vote by agents.…”

mentioning

confidence: 87%

“…Farmer and Geanakoplos (2009) consider uncertainty as the heterogeneity in the environment. Jackson and Yariv (2014) show that utilitarian aggregation of common consumption streams must lead to a present-bias; a result that shows that a specific form of time inconsistency is exhibited by a particular, but common, form of collective utility function. They also present lab experimental evidence that subjects exhibit time inconsistencies when acting as social planners.…”

mentioning

confidence: 93%

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Collective Dynamic Choice: The Necessity of Time Inconsistency

Jackson

Yariv

2015

American Economic Journal: Microeconomics

Self Cite

121

105

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We make collective decisions of many types in our day-to-day lives: from household savings and consumption decisions, to choosing projects and allocating costs in committees, to deciding on taxes and spending in legislatures. A central challenge in making such decisions is that individuals in the collective may have heterogeneous preferences, most especially over the timing of consumption or expenditure of resources.This heterogeneity is quite evident in many applications. For instance, in the US Congress there is great variance in the tenure of representatives. At the start of the 113 th Congress, in the House or Senate, respectively, 17 percent or 14 percent had no previous experience, 37 percent or 40 percent had between 0-8 years of experience, 26 percent (in both chambers) had between 8-16 years of experience, and 20 percent (in both chambers) had over 16 years of service under their belt (see Glassman and Wilhelm 2013). To the extent that tenure in a chamber is a proxy for a representative's remaining time in service and, in particular, the likelihood of running for reelection, it is reasonable to assume that different tenures would be associated with different time preferences when making long-term decisions. As a different example, in (heterosexual) households, it is well documented that women have significantly higher life expectancies than men in most parts of the world.

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Section: Separable Aggregation Of Preferences and Present-biassupporting

confidence: 79%

“…The last conclusion of the proposition then follows from Jackson and Yariv (2014), who show that a utilitarian collective utility function must either be dictatorial or present-biased.…”

Section: Also Such a V Is Necessarily Either Dictatorialmentioning

confidence: 82%

Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 87%

mentioning

confidence: 93%

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Collective Dynamic Choice: The Necessity of Time Inconsistency

Jackson

Yariv

2015

American Economic Journal: Microeconomics

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121

105

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Patience and time consistency in collective decisions

2016

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We present experimental evidence regarding individual and group decisions over time. Static and longitudinal methods are combined to test four conditions on time preferences: impatience, stationarity, age independence, and dynamic consistency. Decision making in groups should favor coordination via communication about voting intentions. We find that individuals are neither patient nor consistent, that groups are both patient and highly consistent, and that information exchange between participants helps groups converge to stable decisions. Finally we provide additional evidence showing that our results are driven by the specific role of groups and not by either repeated choices or individual preferences when choosing for other subjects.JEL codes: C92, D90, D03.Keywords: Time Preferences, Dynamic Consistency, present-bias, Group Decisions. * We thank Aurelien Baillon, Nicolas Houy, Vincent Merlin, Amnon Rapoport, Jeeva Somasundaram, Karine Van Der Straeten, Marie-Claire Villeval and Peter Wakker for helpful comments. We also thank Elven Priour for programming the script and organizing the sessions.

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Individual vs. group decision-making: an experiment on dynamic choice under risk and ambiguity

Carbone

Georgalos

Infante³

2019

Theory Decis

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This paper focuses on comparing individual and group decision making, in a stochastic inter-temporal problem in two decision environments, namely risk and ambiguity. Using a consumption/saving laboratory experiment, we investigate behaviour in four treatments: (1) individual choice under risk; (2) group choice under risk; (3) individual choice under ambiguity and (4) group choice under ambiguity. Comparing decisions within and between decision environments, we find an anti-symmetric pattern. While individuals are choosing on average closer to the theoretical optimal predictions, compared to groups in the risk treatments, groups tend to deviate less under ambiguity. Within decision environments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. We argue that the results might be driven by differences in the levels of ambiguity and risk attitudes between individuals and groups, extending the frequently observed pattern of groups behaving closer to risk and ambiguity neutrality, to its dynamic dimension.

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Present Bias and Collective Dynamic Choice in the Lab

Cited by 28 publications

References 58 publications

Collective Dynamic Choice: The Necessity of Time Inconsistency

Collective Dynamic Choice: The Necessity of Time Inconsistency

Patience and time consistency in collective decisions

Individual vs. group decision-making: an experiment on dynamic choice under risk and ambiguity

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