| Abstract: |
Economists and psychologists have sought to model and explain both impulsive
behavior and the costly but often successful mechanisms by which people
control it. Ainslie [1975][1992][2001] suggests that self-control is often
achieved on account of a phenomenon he calls "choice bundling." This refers to
re-framing of series of discrete choices as single choices over whole series.
Whereas other core elements of Ainslie's account of self-regulation, such as
hyperbolic discounting and intrapersonal bargaining among temporally
distinguished selves have been subject to extensive modeling by economists,
choice bundling has been absent from the economic literature because it has
never been empirically isolated in a controlled setting that meets the
methodological requirements of the discipline. We report a laboratory
experiment that fills this gap. Subjects made choices between smaller, sooner
and larger, later real monetary rewards under experimental treatments that
allowed us to discriminate between choice bundling, reliance on
pre-commitment, and possible magnitude effects on intertemporal discounting.
Risk preference measures were used to obtain accurate discounting estimates,
based on estimation of mixture models that incorporate exponential, hyperbolic
and quasi-hyperbolic discounting functions. We use structural econometric
procedures which are well established in the literature on binary choice and
find strong support for the hypothesis that subjects bundled choices when
conditions allowed them to do so, and consequently exhibited different
discounting behavior in these conditions. |