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An investigation of individual preferences: consistency across incentives and stability over time


Mentzakis, Emmanouil; Zhang, Jingjing (2012). An investigation of individual preferences: consistency across incentives and stability over time. Working paper series / Department of Economics 70, University of Zurich.

Abstract

This study compares individual preferences across incentives (i.e., hypothetical vs. real incentives) and over time (i.e. elicitation at two different points in time) in a choice experiment involving charitable donating decisions. We provide evidence of hypothetical bias but little evidence of instability of individual giving. There is significant heterogeneity in individual preferences, with real incentives either dampening or pronouncing the observed donating behaviour. Neither hypothetical bias nor instability is observed when we examine the propensity of individuals to make internally consistent decisions over identical choices.

This study compares individual preferences across incentives (i.e., hypothetical vs. real incentives) and over time (i.e. elicitation at two different points in time) in a choice experiment involving charitable donating decisions. We provide evidence of hypothetical bias but little evidence of instability of individual giving. There is significant heterogeneity in individual preferences, with real incentives either dampening or pronouncing the observed donating behaviour. Neither hypothetical bias nor instability is observed when we examine the propensity of individuals to make internally consistent decisions over identical choices.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C91, D11, D91, H40
Uncontrolled Keywords:Individual preference, hypothetical bias, time inconsistency, discrete choice experiments, charitable donations
Language:English
Date:April 2012
Deposited On:04 Apr 2012 15:47
Last Modified:05 Apr 2016 15:46
Series Name:Working paper series / Department of Economics
Number of Pages:27
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp070.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php
Permanent URL: http://doi.org/10.5167/uzh-61676

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