Dertwinkel-Kalt, Markus, Gerhardt, Holger ORCID: 0000-0002-5045-2326, Riener, Gerhard, Schwerter, Frederik and Strang, Louis . Concentration Bias in Intertemporal Choice. Rev. Econ. Stud.. OXFORD: OXFORD UNIV PRESS. ISSN 1467-937X

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Abstract

Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for concentration bias, the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects' willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving monetary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings.

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Dertwinkel-Kalt, MarkusUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Gerhardt, HolgerUNSPECIFIEDorcid.org/0000-0002-5045-2326UNSPECIFIED
Riener, GerhardUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Schwerter, FrederikUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Strang, LouisUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
URN: urn:nbn:de:hbz:38-586545
DOI: 10.1093/restud/rdab043
Journal or Publication Title: Rev. Econ. Stud.
Publisher: OXFORD UNIV PRESS
Place of Publication: OXFORD
ISSN: 1467-937X
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: no entry
Uncontrolled Keywords:
KeywordsLanguage
PSYCHOLOGY; MODELMultiple languages
EconomicsMultiple languages
URI: http://kups.ub.uni-koeln.de/id/eprint/58654

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