Time-Inconsistent Generosity: Present Bias Across Individual and Social Contexts

Abstract We investigate dynamically inconsistent time preferences across contexts with and without interpersonal trade-offs. In a longitudinal experiment, participants make a series of intertemporal allocation decisions of real-effort tasks between themselves and another person. Our results reveal that agents are present-biased when making choices that only affect themselves but not when choosing for others. Despite this asymmetry, we find no evidence for time-inconsistent generosity, i.e., when choices involve trade-offs between own and other's consumption. Structural estimations reveal no individual-level correlation of present bias across contexts. Discounting in social situations thus seems to be conceptually different from discounting in individual situations.

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On the Value of Penalties in Time-Inconsistent Planning

ACM Transactions on Economics and Computation ◽

10.1145/3456768 ◽

2021 ◽

Vol 9 (3) ◽

pp. 1-18

Author(s):

Susanne Albers ◽

Dennis Kraft

Keyword(s):

Approximation Algorithm ◽

Combinatorial Problem ◽

Task Graph ◽

Np Hard ◽

Present Bias ◽

Time Inconsistent ◽

Commitment Devices ◽

The Impact ◽

Over Time ◽

Commitment Device

People tend to behave inconsistently over time due to an inherent present bias. As this may impair performance, social and economic settings need to be adapted accordingly. Common tools to reduce the impact of time-inconsistent behavior are penalties and prohibition. Such tools are called commitment devices. In recent work Kleinberg and Oren [6, 7] connect the design of prohibition-based commitment devices to a combinatorial problem in which edges are removed from a task graph G with n nodes. However, this problem is NP-hard to approximate within a ratio less than √n/3 [2]. To address this issue, we propose a penalty-based commitment device that does not delete edges but raises their cost. The benefits of our approach are twofold. On the conceptual side, we show that penalties are up to 1/β times more efficient than prohibition, where β ϵ (0,1] parameterizes the present bias. On the computational side, we significantly improve approximability by presenting a 2-approximation algorithm for allocating the penalties. To complement this result, we prove that optimal penalties are NP-hard to approximate within a ratio of 1.08192.

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Long‐Term Contracting With Time‐Inconsistent Agents

Econometrica ◽

10.3982/ecta17126 ◽

2021 ◽

Vol 89 (2) ◽

pp. 793-824

Author(s):

Daniel Gottlieb ◽

Xingtan Zhang

Keyword(s):

Bargaining Power ◽

Welfare Loss ◽

Present Bias ◽

Exclusive Contracts ◽

Risk Neutral ◽

Time Inconsistent

We study contracts between naive present‐biased consumers and risk‐neutral firms. We show that the welfare loss from present bias vanishes as the contracting horizon grows. This is true both when bargaining power is on the consumers' and on the firms' side, when consumers cannot commit to long‐term contracts, and when firms do not know the consumers' naiveté. However, the welfare loss from present bias does not vanish when firms do not know the consumers' present bias or when they cannot offer exclusive contracts.

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Time-Inconsistent Planning: Simple Motivation Is Hard to Find

Proceedings of the AAAI Conference on Artificial Intelligence ◽

10.1609/aaai.v34i06.6537 ◽

2020 ◽

Vol 34 (06) ◽

pp. 9843-9850

Author(s):

Fedor V. Fomin ◽

Torstein J. F. Strømme

Keyword(s):

Polynomial Algorithm ◽

Time Inconsistency ◽

Structural Parameter ◽

Reasonable Assumption ◽

Task Graph ◽

Present Moment ◽

Graph Theoretic ◽

Present Bias ◽

Np Complete ◽

Time Inconsistent

People sometimes act differently when making decisions affecting the present moment versus decisions affecting the future only. This is referred to as time-inconsistent behaviour, and can be modeled as agents exhibiting present bias. A resulting phenomenon is abandonment, which is when an agent initially pursues a task, but ultimately gives up before reaping the rewards. With the introduction of the graph-theoretic time-inconsistent planning model due to Kleinberg and Oren, it has been possible to investigate the computational complexity of how a task designer best can support a present-biased agent in completing the task. In this paper, we study the complexity of finding a choice reduction for the agent; that is, how to remove edges and vertices from the task graph such that a present-biased agent will remain motivated to reach his target even for a limited reward. While this problem is NP-complete in general, this is not necessarily true for instances which occur in practice, or for solutions which are of interest to task designers. For instance, a task designer may desire to find the best task graph which is not too complicated. We therefore investigate the problem of finding simple motivating subgraphs. These are structures where the agent will modify his plan at most k times along the way. We quantify this simplicity in the time-inconsistency model as a structural parameter: The number of branching vertices (vertices with out-degree at least 2) in a minimal motivating subgraph. Our results are as follows: We give a linear algorithm for finding an optimal motivating path, i. e. when k = 0. On the negative side, we show that finding a simple motivating subgraph is NP-complete even if we allow only a single branching vertex — revealing that simple motivating subgraphs are indeed hard to find. However, we give a pseudo-polynomial algorithm for the case when k is fixed and edge weights are rationals, which might be a reasonable assumption in practice.

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Doing It Now or Later

The American Economic Review ◽

10.1257/aer.89.1.103 ◽

1999 ◽

Vol 89 (1) ◽

pp. 103-124 ◽

Cited By ~ 1398

Author(s):

Ted O'Donoghue ◽

Matthew Rabin

Keyword(s):

Self Control ◽

Control Problems ◽

Present Bias ◽

Future Self ◽

Time Inconsistent

We examine self-control problems—modeled as time-inconsistent, present-biased preferences—in a model where a person must do an activity exactly once. We emphasize two distinctions: Do activities involve immediate costs or immediate rewards, and are people sophisticated or naive about future self-control problems? Naive people procrastinate immediate-cost activities and preproperate—do too soon—immediate-reward activities. Sophistication mitigates procrastination, but exacerbates preproperation. Moreover, with immediate costs, a small present bias can severely harm only naive people, whereas with immediate rewards it can severely harm only sophisticated people. Lessons for savings, addiction, and elsewhere are discussed. (JEL A12, B49, C70, D11, D60, D74, D91, E21)

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Linguistic Interactions: A Therapeutic Consideration for Adults With Aphasia

Perspectives on Augmentative and Alternative Communication ◽

10.1044/aac17.3.93 ◽

2008 ◽

Vol 17 (3) ◽

pp. 93-98

Author(s):

Lynn E. Fox

Keyword(s):

Clinical Outcomes ◽

Social Contexts ◽

Interaction Models ◽

Social Communities ◽

Wernicke's Aphasia ◽

Communication Challenges ◽

Therapeutic Consideration ◽

Patterns Of Interaction ◽

Structural Language

Abstract Linguistic interaction models suggest that interrelationships arise between structural language components and between structural and pragmatic components when language is used in social contexts. The linguist, David Crystal (1986, 1987), has proposed that these relationships are central, not peripheral, to achieving desired clinical outcomes. For individuals with severe communication challenges, erratic or unpredictable relationships between structural and pragmatic components can result in atypical patterns of interaction between them and members of their social communities, which may create a perception of disablement. This paper presents a case study of a woman with fluent, Wernicke's aphasia that illustrates how attention to patterns of linguistic interaction may enhance AAC intervention for adults with aphasia.

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Mental representation of economic crisis in Italian and Swiss samples 1The authors would like to thank Maurizio Mistri for his help in the construction of items. This research was supported by a grant from the Italian Murst (ex 40%).

Swiss Journal of Psychology ◽

10.1024//1421-0185.60.1.11 ◽

2001 ◽

Vol 60 (1) ◽

pp. 11-14 ◽

Cited By ~ 10

Author(s):

Lucia Savadori ◽

Eraldo Nicotra ◽

Rino Rumiati ◽

Roberto Tamborini

Keyword(s):

Economic Crisis ◽

Mental Representation ◽

Mental Representations ◽

Social Contexts ◽

Raw Material ◽

National Context ◽

Cluster Procedure ◽

Total N ◽

Two Samples ◽

Important Symptom

The content and structure of mental representation of economic crises were studied and the flexibility of the structure in different social contexts was tested. Italian and Swiss samples (Total N = 98) were compared with respect to their judgments as to how a series of concrete examples of events representing abstract indicators were relevant symptoms of economic crisis. Mental representations were derived using a cluster procedure. Results showed that the relevance of the indicators varied as a function of national context. The growth of unemployment was judged to be by far the most important symptom of an economic crisis but the Swiss sample judged bankruptcies as more symptomatic than Italians who considered inflation, raw material prices and external accounts to be more relevant. A different clustering structure was found for the two samples: the locations of unemployment and gross domestic production indicators were the main differences in representations.

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