The elicitation of time preferences

Abstract

We compare three methods for the elicitation of time preferences in an experimental setting: the Becker-DeGroot-Marschak (BDM) procedure (BDM), a second price auction and the multiple price list format. The …rst two methods have been used rarely to elicit time preferences. Although all methods used are broadly strategically equivalent, and should induce the same ‘truthful’revelation, we …nd that the methods do di¤er: the money discount rates elicited with the multiple price list tend to be higher than those elicited with the other two methods. Furthermore, there are no signi…cant di¤erences between the rates elicited with the BDM and the auction elicitation procedure. We wish to thank all the tireless sta ¤ at CEEL, and in particular Marco Tecilla, for excellent technical support. We are grateful to Oxana Tokarchuk, Anthony Ziegelmeyer and seminar participants to the “What is behavioural in behavioural economics " workshop for comments and helpful advice, and Matteo Ploner, Ivan Soraperra for superb assistance with research. Manzini and Mariotti gratefully acknowledge …nancial support from ESRC through grant RES-000-22-1636. 1 1

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