Title: A computational experiment on elicitation task bias in time preference

Authors: Oksana Tokarchuk; Roberto Gabriele

Addresses: Faculty of Economics and Management, Competence Centre in Tourism Management and Tourism Economics (TOMTE), Free University of Bolzano, Brunico Campus, Piazzetta dell'università, 1, (39031) Brunico (Bruneck), Italy ' Department of Economics and Management, University of Trento, via Inama, 5 (38122) Trento, Italy

Abstract: Experimental results from research on time preference are often controversial. We propose a systematic investigation of choice task in multiple price list (MPL) format, frequently used for experiments on time preference, based on a computer simulation analysis. Our experiments with artificial subjects demonstrate that elicited discount rates are highly dependent on the structure of elicitation task. Indeed, implementing the choice task in MPL with nominal structure provides observations of hyperbolic discounting. Choice task in MPL with interest rates structure leads to elicitations of discount rates compatible with exponential discounting. The comparison between discount rates elicited with artificial and human subjects suggests that the behaviour of human subjects in experiments with MPL can be described by the simple rules of positive discounting and anchoring. Experimental procedures related with MPL setting has to take into account the results and modify the task accordingly.

Keywords: elicitation task bias; time preference; choice task; MPL; multiple price list; computational modelling; simulation; discount rates; hyperbolic discounting; interest rates; exponential discounting.

DOI: 10.1504/IJCEE.2015.070614

International Journal of Computational Economics and Econometrics, 2015 Vol.5 No.3, pp.237 - 256

Received: 14 Nov 2013
Accepted: 31 Jul 2014
Published online: 14 Jul 2015 *

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