Temporal discounting of gains and losses of time: An experimental investigation

• Published in: Journal of risk and uncertainty Vol. 57; no. 1; pp. 1 - 28
• Main Authors: Abdellaoui, Mohammed, Gutierrez, Cédric, Kemel, Emmanuel
• Format: Journal Article
• Language: English
• Published: New York Springer 01.08.2018; Springer US; Springer Nature B.V
• Subjects: Behavioral psychology; Decision making; Discounting; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Environmental Economics; Heterogeneity; Microeconomics; Money; Operations Research/Decision Theory; Patience; Risk; Discounted utility; Negative discounting; Reference point; Dynamic consistency; D15; Heterogenous intertemporal preferences; C91; J22; Gain-loss asymmetry; D91
• ISSN: 0895-5646; 1573-0476
• DOI: 10.1007/s11166-018-9287-1

This paper investigates "asymmetries" between non-monetary gains and losses in intertemporal choice. We considered gains and losses of spare/working time with respect to a reference duration defined in a working contract. Specifically, we elicited a behavioral model of intertemporal choice that accounts for a gain/lossdependent discounting function and a reference-dependent utility. Additionally, we did not impose preference for the present (positive discounting) and allowed for both decreasing and increasing impatience. While our results are standard regarding the discount of money (our baseline treatment), our subjects heavily discounted gains of time. More patience was observed for losses of time and a sizable portion of subjects even exhibited negative discounting, i.e. they preferred to expedite losses of time. Our econometric estimations also reveal a much larger heterogeneity of behavior in terms of both utility and discounting for gains and losses of spare time as compared to money.