We propose a simple method for eliciting individual time preferences without estimating utility functions even in settings where background consumption changes over time. It relies on lottery tickets with high rewards. In a standard intertemporal choice model high rewards decouple lottery choices from variation in background consumption. We validate our elicitation method experimentally on two student samples: one asked in December when their current budget is reduced by extraordinary expenditures for Christmas gifts; the other asked in February when no such extra constraints exist. We illustrate an application of our method with unemployed job seekers which naturally have income/consumption variation.
Eliciting time preferences when income and consumption vary: Theory, validation & application to job search
With Michèle Belot and Paul Muller. R&R at AER: Micro.
We propose a simple method to elicit time preferences at the individual level even when income and consumption varies over time. We validate the method and apply it to correlate individuals’ impatience with job search behavior and success.
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Working Papers
CHEAP TALK MESSAGES FOR MARKET DESIGN: THEORY AND EVIDENCE FROM A LABOR MARKET WITH DIRECTED SEARCH
with John Horton and Ramesh Johari (2021, new version coming soon) When heterogeneous employers can send cheap-talk messages about the quality of candidates they would like, this improves sorting, increases wages at high firms and lowers them at low firms, and improves efficiency. In a field experiment we indeed see significant changes in labor allocations and wages in these directions. Go to paper
Working Papers
Do the Long-term Unemployed Benefit from Automated Occupational Advice during Online Job Search?
with Michèle Belot and Paul Muller. In a randomized field experiment, we provide personalized suggestions about suitable alternative occupations to long-term unemployed job seekers in the UK. Effects on the primary pre-registered outcomes of "finding a stable job" and "reaching a cumulative earnings threshold" are positive, are significant among those who searched at least once, and are more pronounced for those who are longer unemployed. Go to paper
Working Papers
An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies
joint with L.Brotherhood, C. Santos and M. Tertilt, R&R at Review of Economic Studies. This paper explores policies in epidemiological model of Covid-19 where individual's of different age (and associated risk) make private social distancing decisions. Social distancing especially by the old is substantial, and the optimal social planner restricts the young more to provide some slack for the old. Costs of this is much lower when there is also testing. Go to paper