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Most experimental evidence of hyperbolic discounting is based on violations of either stationarity or time consistency. Stationarity is violated when intertemporal choices differ for trade-offs in the near versus the more distant future. Time consistency on the other hand is violated if the optimal allocation for specific dates changes over time. Both types of choice reversals may however also result from time-varying discount rates. Hyperbolic discounting is an unambiguous explanation for choice reversals only if individuals simultaneously violate both stationarity and time consistency. Our field experiment examines the extent to which this is the case. At different points in time, the same participants allocated a future gift over sooner-smaller and later-larger rewards with varying front-end delays. We find that most violations of time consistency do not coincide with violations of stationarity. Random noise in decision-making alone does not explain this finding. Instead, we find a significant association between individual violations and changes in household wealth, in particular for participants with less access to credit. We conclude that in a context of liquidity constraints, eliciting violations of either stationarity or time consistency alone is insufficient to identify hyperbolic discounting.

This paper presents results from two large-scale natural field experiments that tested the effect of social norm messages on tax compliance. Using administrative data from > 200,000 individuals in the United Kingdom, we show that including social norm messages in standard reminder letters increases payment rates for overdue tax. This result offers a rare example of social norm messages affecting tax compliance behavior in a real world setting. We find no evidence that loss framing is more effective than gain framing. Descriptive norms appear to be more effective than injunctive norms. Messages referring to public services or financial information also significantly increased payment rates. The field experiments accelerated the collection of tax revenue at little cost.

This discussion paper resulted in a publication in the 'Journal of Economic Behavior & Organization' , 2014, 98, 29-40. We analyze one of the explanations why people participate in lotteries. Our hypothesis stipulates that part of the value that a unit of money buys in lotteries is consumed before the actual resolution in the form of emotions such as hope. In other words, a person holding a lottery ticket may prefer a delayed resolution of risk due to positive anticipatory emotions. This conjecture is tested in an experiment with real lottery tickets. We show that our theoretical considerations may contribute to explaining empirical puzzles associated with lottery participation, timing of resolution and the spreading of drawings. More specifically, we find that a substantial number of participants prefer delayed resolution, that anticipated thrill is the main variable explaining this choice, that emotions actually experienced during the waiting period are indeed predominantly positive and correlated with predictions. Finally, we find that a great majority prefers to 'spread' chances, that is, to obtain one ticket for each of two drawings rather than two for the same drawing.

Ecological Economics, 64 (4), ISSN:0921-8009

This is the accepted version of a work that was accepted for publication in Transportation Research Part B: Methodological. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Transportation Research Part B: Methodological, Volume 36, Number 4, May 2002 , pp. 361-384. This paper analyzes the potential demand for alternative fuel vehicles. The alternative fuel vehicles we consider are liquid propane gas and electric powered vehicles in addition to dual-fuel vehicles. The data were obtained from a stated preference survey in which each respondent, in a randomly selected sample, was exposed to 15 experiments. In each experiment the respondents were asked to rank three hypothetical vehicles characterized by specific attributes, according to the respondents' preferences. Several versions of a random utility model are formulated and estimated. They include a model for rank ordered data, and models that allow for different types of correlation in preferences across experiments. Apart from one case the model specifications are estimated from the data on first choices. The most general model turns out to predict aggregate second and third choices rather well. The model is applied to assess the willingness to pay for alternative fuel vehicles. --Keywords: Random utility; Alternative fuel vehicles; Models for ranking; Serially dependent preferences , Stated preference.