Journal
AMERICAN ECONOMIC REVIEW
Volume 104, Issue 12, Pages 4184-4204Publisher
AMER ECONOMIC ASSOC
DOI: 10.1257/aer.104.12.4184
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Funding
- Divn Of Social and Economic Sciences
- Direct For Social, Behav & Economic Scie [0963583] Funding Source: National Science Foundation
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We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, utilitarian aggregation necessitates a present bias. In lab experiments three quarters of social planners exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of distributional concerns.
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