Fickle Groups: An Empirical Assessment of Time Preferences Using Experimental Data∗

Inconsistencies in individual intertemporal choices have been well documented in Economics. This paper studies individual and collective decisions through the preference elicitation method over task (real consumption). For this purpose, a joint experimental elicitation of time preferences was performed for the groups (who have to reach a consensus) as well as for their individual members. Using an analysis of the elicited choices of decision making over time, the study found that group/joint decision making resulted in much higher elicited present-bias (procrastination) as compared to individual decision making. This finding is robust to a variety of alternative specifications. The results also suggest that the group/joint aspect of the decision-making process exacerbates standard measures of present-bias due to group members’ discount rate heterogeneity. The study also concludes that the presence of a dominant individual based on bargaining power improves the procrastination tendency in group. JEL classification: C91, D12, D81