Economics Research Seminar Series: Elif Incekara-Hafalir, UTS

Research topic: The Impact of Expectations on Time Preference   

Elif Incekara-Hafalir, University of Technology Sydney 

Topic

The Impact of Expectations on Time Preference  

abstract

We investigate the effect of expectations on measured time preferences within an experimental framework. The key aspect of our experimental design is that we manipulate the subjects’ expectations regarding when they will receive their payments. One group of participants expects their payment in 8 weeks (Future Expectation) while another group expects to receive their payments on the same day as the experiment (Today Expectation). We did not manipulate the expectations of the Control group participants, who are likely to have an implicit expectation of receiving their reward on the same day as it is standard to pay subjects in economics experiments just after the participation. We then test the time preference measurements of these three groups. We find that the Future Expectation group is more patient than the other two groups and the Today Expectation group is not statistically different from the Control group. These results align with the predictions of a simple theoretical model we developed, which illustrates how expectations over the timing of payment might affect elicited time preferences.   

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