Present Bias: Lessons Learned and To Be Learned

While present bias is an old idea, it only took hold in economics following David Laibson's (1994) dissertation. Over the past 20 years, research has led to a much better theoretical understanding of present bias, when and how to apply it, and which ancillary assumptions are appropriate in diff...

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Published in:The American economic review Vol. 105; no. 5; pp. 273 - 279
Main Authors: O'Donoghue, Ted, Rabin, Matthew
Format: Journal Article
Language:English
Published: Nashville American Economic Association 01.05.2015
American Economic Assoc
Subjects:
Bias
Consumption
Contextual analysis
Discounting
Economic behaviour
Economic models
Economic research
Economic theory
Economics
Economists
Empirical research
Experiments
Intuition
Liquidity
Modeling
Observational research
Procrastination
Psychologists
Research biases
Studies
TWENTY YEARS OF PRESENT BIAS
ISSN:0002-8282, 1944-7981
Online Access:Get full text
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Summary:While present bias is an old idea, it only took hold in economics following David Laibson's (1994) dissertation. Over the past 20 years, research has led to a much better theoretical understanding of present bias, when and how to apply it, and which ancillary assumptions are appropriate in different contexts. Empirical analyses have demonstrated how present bias can improve our understanding of behavior in various economic field contexts. Nonetheless, there is still much to learn. In this paper, we give our assessment of some lessons learned, and to be learned.
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ISSN:0002-8282
1944-7981
DOI:10.1257/aer.p20151085