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Paid and hypothetical time preferences are the same: lab, field and online evidence

Published online by Cambridge University Press:  14 March 2025

Pablo Brañas-Garza Open the ORCID record for Pablo Brañas-Garza [Opens in a new window] ,
Diego Jorrat ,
Antonio M. Espín  and
Angel Sánchez
Pablo Brañas-Garza*
Affiliation:
LoyolaBehLab, Universidad Loyola Andalucía, Córdoba, Spain Fundación ETEA, Universidad Loyola Andalucía, Córdoba, Spain
Diego Jorrat
Affiliation:
LoyolaBehLab, Universidad Loyola Andalucía, Córdoba, Spain Fundación ETEA, Universidad Loyola Andalucía, Córdoba, Spain
Antonio M. Espín
Affiliation:
LoyolaBehLab, Universidad Loyola Andalucía, Córdoba, Spain Department of Social Anthropology, Universidad de Granada, Granada, Spain
Angel Sánchez
Affiliation:
GISC & IBiDat, Universidad Carlos III de Madrid, Leganés, Spain BIFI, Universidad de Zaragoza, Zaragoza, Spain
*
branasgarza@gmail.com
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Abstract

The use of real decision-making incentives remains under debate after decades of economic experiments. In time preferences experiments involving future payments, real incentives are particularly problematic due to between-options differences in transaction costs, among other issues. What if hypothetical payments provide accurate data which, moreover, avoid transaction cost problems? In this paper, we test whether the use of hypothetical or one-out-of-ten-participants probabilistic—versus real—payments affects the elicitation of short-term and long-term discounting in a standard multiple price list task. We analyze data from a lab experiment in Spain and well-powered field and online experiments in Nigeria and the UK, respectively (N = 2,038). Our results indicate that the preferences elicited using the three payment methods are mostly the same: we can reject that either hypothetical or one-out-of-ten payments change any of the four preference measures considered by more than 0.18 SD with respect to real payments.

Keywords

Time preferencesHypothetical vs. real payoffsLabFieldOnline experimentsBRIS

JEL classification

C91: Laboratory, Individual Behavior C93: Field Experiments
Type
Original Paper
Information
Experimental Economics , Volume 26 , Issue 2 , April 2023 , pp. 412 - 434
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2022.

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Footnotes

Supplementary Information The online version contains supplementary material available at https://doi.org/10.1007/s10683-022-09776-5.

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