Abstract

PEREIRA, Antonio Gualberto  and  AFONSO, Luís Eduardo. HYPERBOLIC DISCOUNTING AND MAGNITUDE EFFECT IN INTERTEMPORAL CHOICES. EVIDENCE FROM A SURVEY WITH MONETARY DECISIONS. Innovar [online]. 2022, vol.32, n.84, pp.57-73.  Epub May 19, 2022. ISSN 0121-5051.  https://doi.org/10.15446/innovar.v32n84.99678.

This study seeks to answer the following questions: Is there evidence of intertemporal inconsistency in the decisions that involve the reception of monetary values? Are people subject to the magnitude effect of intertemporal decisions that involve the reception of monetary values? In doing so, this research will try to identify inconsistencies in intertemporal choices involving the reception of monetary resources at different times, grounded in the premise that these type of decisions could also be affected by the so-called magnitude effect, a robust finding that has been identified for hypothetical choices involving money. To address this issue, we calculated the implicit discount rate of individuals and then classified these individuals based on the construct of "impatience." Adapted scenarios from the work by Sutter et al. (2013) were used for this research, whose data analysis phase involved non-parametric testing to differentiate medians and identify the most relevant characteristics of respondents. There is evidence of inconsistent behavior in intertemporal choices for the scenarios presented, with the occurrence of growing impatience for the intervals shifted into the future, a finding that goes against those of the empirical literature on hyperbolic discounting. In addition, the occurrence of the magnitude effect was proved, confirming previous research findings on monetary amounts applied to long-term intertemporal choices.

Keywords : Temporal inconsistency; temporal preferences; monetary resources; survey; discount rate.

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