Anchoring effects in experimental discount rate elicitation

ABSTRACT

Discount rates are often elicited using incentivized or hypothetical multiple price lists. We conduct two multiple price lists according to Coller and Williams (Experimental Economics 2: 107–127, 1999) with varying ranges of larger–later payments. Participants carry out both tasks and are randomly assigned to a task order as well as to a payment or no-payment treatment. Our results indicate that the range of the first completed task anchors discount rate decisions. Participants who begin the task with the lower range of the larger–later payments stated lower discount rates than participants who start with the task containing a wider range. Paying monetary incentives does not influence the detected anchor effect.

KEYWORDS:

• Discount rates
• intertemporal decision-making
• anchoring effect
• experimental economics
• time preference

JEL CLASSIFICATION:

• D90
• C91

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For demographics, we refer to Table A1 in the appendix.

² The daily spending of German farmer households for food, beverages and tobacco from the year 2008 amounting €13.23 (Federal Statistical Office 2011) is used.

³ Each task order was carried out by 37 participants in the no-payment treatment and by 36 participants in the payment treatment.

⁴ Included variables are age, gender, body height, number of children, smoker, regular sport activity and income classes.

Additional information

Funding

The authors gratefully acknowledge financial support from the German Research Foundation (DFG).