WORKING OVER TIME: DYNAMIC INCONSISTENCY IN REAL EFFORT TASKS

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 present bias. However, such monetary studies contain often-discussed confounds. In this article, we sid...

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Bibliographic Details
Published in:The Quarterly journal of economics 2015-08, Vol.130 (3), p.1067-1116
Main Authors: Augenblick, Ned, Niederle, Muriel, Sprenger, Charles
Format: Article
Language:English
Subjects:
Bias
Decision making models
Experimental methods
Hours of work
Labour market
Monetary economics
Monetary incentives
Resource allocation
Studies
Time management
Working conditions
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Summary: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 present bias. However, such monetary studies contain often-discussed confounds. In this article, we sidestep these confounds and investigate choices over consumption (real effort) in a longitudinal experiment. We pair this effort study 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.
ISSN:0033-5533
1531-4650
DOI:10.1093/qje/qjv020