Temptation: Immediacy and Certainty

Last registered on September 16, 2019

View Trial History

Pre-Trial

Trial Information

General Information

Title

Temptation: Immediacy and Certainty

RCT ID

AEARCTR-0004651

Initial registration date

September 12, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

September 16, 2019, 2:03 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

United States of America

Region

Primary Investigator

Name

Lucas Reddinger

Affiliation

UCSB

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2019-09-15

End date

2019-10-04

Keywords

Labor

Additional Keywords

Immediacy effect, certainty effect, Allais paradox, common-ratio effect, non-expected utility, independence axiom, intertemporal choice, dynamic inconsistency, nonstationarity, myopia, present-bias, future-bias

JEL code(s)

D03, D81, D90

Secondary IDs

Abstract

A choice is most tempting when it is both immediate and certain. Prevailing experimental measures of static present-bias rely on the random incentive scheme (RIS) to gather rich data from subjects. Recent studies show that RIS adds background risk to decisions, thereby increasing risk-taking behavior. Evidence has shown that the immediacy effect is significantly moderated (or even eliminated) by uncertainty. Thus estimates of the present-bias factor $\beta$ are possibly biased upward toward unity, underestimating present-bias intensity. I conduct a framed field experiment that determines whether uncertainty indeed diminishes the immediacy effect by using real-effort tasks to approximate immediate and certain utility flows. Subjects allocate tasks using convex time budgets under both RIS and certain implementation. I compare within-subject estimates of the quasi-hyperbolic present-bias factor under these two mechanisms, assuming convex effort costs. I type individuals as present- or future-biased under each mechanism, which provides data on the interaction between the immediacy and certainty effects within subjects. I also report how the introduction of uncertainty affects the present-bias parameter on average, which would be some of the first incentivized evidence of the effect of uncertainty on immediacy.

External Link(s)

Registration Citation

Citation

Reddinger, Lucas. 2019. "Temptation: Immediacy and Certainty." AEA RCT Registry. September 16. https://doi.org/10.1257/rct.4651-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2019-09-15

Intervention End Date

2019-10-04

Primary Outcomes

Primary Outcomes (end points)

Primary outcomes of interest are the real-effort task allocations chosen by subjects between two weeks.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Subjects are asked to complete daily survey questions regarding their outside labor market participation which are used to help calibrate the structural model. Subjects are asked to complete an exit survey that includes portions of the Behavioral Risk Factor Surveillance System Questionnaire which are used to look for relationships between time and risk preferences and included health survey responses. Subjects must complete an intake survey with demographic and socioeconomic survey questions in order to participate in treatments; these data will be used to predict attrition and may also be used as controls in prediction of primary results.

Secondary Outcomes (explanation)

Experimental Design

Subjects are asked to allocate approximately 30 minutes of work between pairs of work days occurring over the course of two weeks. Subjects allocate work between Monday of Week 1 and Monday of week 2; subjects repeat this procedure for Tuesday, Wednesday, and Thursday.

Decisions for Mondays are made on the first Monday. Decisions for Tuesdays are made on the first Tuesday. Decisions for Wednesdays are made both on Monday and Wednesday. Decisions for Thursdays are made on both Tuesday and Thursday.

Monday and Wednesday constitute Treatment A; Tuesday and Thursday constitute Treatment B. For each subject, one treatment is randomly assigned the RIS treatment, while the other treatment is randomly assigned the certainty treatment. Thus treatments are randomly ordered between subjects.

Both treatments offer five discount rates $R \in \{0.5, 0.75, 1, 1.25, 1.5\}$ at which subjects must allocate a present value of 360 tasks between the pair of days in question.

Subjects know that for the first day of the RIS treatment, one of their five decisions made on that same day will be implemented. Subjects also know that for the second day of the RIS treatment, one of their five decisions from that day or one of their five decisions from the previous day in that treatment will be implemented. Each decision is implemented with uniform probability.

Subjects know that for the first day of the certainty treatment, the decision corresponding to $R = 1.25$ will be implemented with certainty, while the decisions for the other four rates are merely hypothetical. Subjects also know that for the second day of the certainty treatment, the decision corresponding to $R = 1.25$ made on that same day will be implemented with certainty, while the allocations made for the other four rates on that day and the allocations made for all five rates on the previous day in that treatment are merely hypothetical.

Experimental Design Details

Randomization Method

Randomization is done in advance using a computer program.

Randomization Unit

The two treatments are randomly ordered by subject. The decisions chosen for implementation are randomized in advance.

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

The pilot study will have 12 individual subjects; each subject is clustered. The full study will have 60 individual subjects; each subject is clustered.

Sample size: planned number of observations

The pilot study will have 12 individual subjects each making 30 task allocation decisions, yielding 360 observations. The full study will have 60 individual subjects each making 30 task allocation decisions, yielding 1800 observations.

Sample size (or number of clusters) by treatment arms

The two treatments are conducted within-subjects. Each treatment in the pilot study has 12 subjects/clusters and 360 observations. Each treatment in the full study has 60 subjects/clusters and 1800 observations.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB