Temptation over Time: Delays HelpJournal of Economic Behavior & Organization
no.177 (2020): 752-761.
Does temptation decline over time? Recent studies have highlighted the importance of Pavlovian processes but less is known about how these responses change over time. In a laboratory experiment, every subject made a choice between a banana and chocolate, but a treatment group was informed in advance about the existence of the upcoming choice. These treated subjects were 28% more likely to ultimately choose a banana. Testing an alternative hypothesis of limited willpower, I find no evidence of a simple resource depletion effect using previously induced effort.
Time Lotteries and Stochastic Impatience
(with David Dillenberger, Daniel Gottlieb, and Pietro Ortoleva)Econometrica
88, no. 2 (2020): 619-656.
We study preferences over lotteries in which both the prize and the payment date are uncertain. In particular, a time lottery is one in which the prize is fixed but the date is random. With Expected Discounted Utility, individuals must be risk seeking over time lotteries (RSTL). In an incentivized experiment, however, we find that almost all subjects violate this property. Our main contributions are theoretical. We first show that within a very broad class of models, which includes many forms of non-Expected Utility and time discounting, it is impossible to accommodate even a single violation of RSTL without also violating a property we termed Stochastic Impatience, a risky counterpart of standard Impatience. We then present two positive results. If one wishes to maintain Stochastic Impatience, violations of RSTL can be accommodated by keeping Independence within periods while relaxing it across periods. If, instead, one is willing to forego Stochastic Impatience, violations of RSTL can be accommodated with a simple generalization of Expected Discounted Utility, obtained by imposing only the behavioral postulates of Discounted Utility and Expected Utility. Supplementary Appendix
This paper examines how past effort can impact subsequent effort, such as when effort is reduced following an interruption. I conducted 3 incentivized real-effort experiments in which both piece rates and leisure options were manipulated and find effort displays significant stickiness, even in the absence of switching costs. I demonstrate that this intertemporal evidence is indicative of effort momentum , rather than on-the-job learning, reciprocity, or income targeting. Five minutes after incentives return to baseline, 45% of the effort increase or decrease persists. This finding is especially relevant for studies employing individual fixed effects and for organizations concerned with worker disruptions.
Risky Choices Over Goods
This paper examines how risk preferences differ over goods and in-kind monetary rewards. I study an incentivized experiment in which control subjects allocate Amazon.com credit over uncertain states, whereas treated subjects allocate self-selected Amazon.com goods over uncertain states. Under a standard model with perfect information of prices, I demonstrate allocations would be identical between treatments. In practice, subjects demonstrate considerable differences across goods and monetary rewards, with credit being more evenly allocated among the uncertain states. Using an additional information treatment, I find no evidence that price or product uncertainty explains these differences. I further show that these results are not being driven by fungibility, functional form, or good discreteness.
Altruism, Reciprocal Giving, and Information
A theoretical work on the impossibility of reciprocal giving equilibria. With modest assumptions, I find that
two individuals cannot both prefer to give to the other. As an example, I find that a child will never purchase
a gift that the parent could otherwise buy in the marketplace. Using this as a starting point, I consider
the three person extension and find that a gift will never pass through the hands of all three individuals,
completing a cycle. I also explore altruism with imperfect information. With imperfect knowledge regarding
preferences, I explore two models. The first is when a husband assumes his wife has the same preferences as
himself, and vice versa. If both have separately additive concave utility functions, I prove that reciprocal
giving equilibria cannot occur. The second case looks at altruistic learning and concludes that altruistic
individuals want to learn more about "happier-than-average" individuals.