Template-Type: ReDIF-Paper 1.0
Author-Name: Claudia Cerrone
Author-Name-First: Claudia
Author-Name-Last: Cerrone
Author-Name: Anujit Chakraborty
Author-Name-First: Anujit
Author-Name-Last: Chakraborty
Author-Name: Hyok Jung Kim
Author-Name-First: Hyok Jung
Author-Name-Last: Kim
Author-Name: Leonhard Lades
Author-Name-First: Leonhard
Author-Name-Last: Lades
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Estimating Present Bias and Sophistication over Effort and Money
Abstract: We use a real-effort experiment to jointly estimate present bias (β) and sophistication (̂ β) parameters, separately over money (βm, ̂ βm) and effort (βe, ̂ βe). Our novel incentive structure aligns the choice scenario with the canonical assumption of choices being the interior optima of a concave utility-maximization exercise. Participants choose to (and predict to) complete 14% (and 10%) fewer tasks on the same day than on a future day, leading to an estimated βe between 0.70 and .79 (and ̂ βe between 0.80 and .88). We find no evidence of present bias or sophistication over money
Length: 
File-URL: https://repec.dss.ucdavis.edu/files/mqi34eluxel9pvwsfpcmier4etpi/Nov11_2023.pdf
File-Format: application/pdf
Number: 359
Classification-JEL: 
KeyWords: present bias, sophistication, beliefs, experiment, real effort task, experiment
Creation-Date: 20231106
Handle: RePEc:cda:wpaper:359