Concentration Bias in Intertemporal Choice

Arbeitspapier

Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias”, the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects’ willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving monetary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9011

Classification and Topics

• Classification: Wirtschaft ; Microeconomic Behavior: Underlying Principles
• Subject: attention ; focusing ; bounded rationality ; intertemporal choice ; future bias ; present bias ; framing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dertwinkel-Kalt, Markus ; Gerhardt, Holger ; Riener, Gerhard ; Schwerter, Frederik ; Strang, Louis
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/235381
• Last update: 10.03.2025, 11:44 AM CET