A Kinky Consistency: Experimental Evidence of Behavior under Linear and Nonlinear Budget Constraints

• 成果类型: Article
• 署名作者: Huet-Vaughn, Emiliano; McClure, Ethan M. L.; Serrato, Juan Carlos Suarez
• 署名单位: Claremont Colleges; Pomona College; University of California System; University of California Berkeley; Stanford University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20220086
• 发表日期: 2024
• 页码: 424-458
• 关键词: Revealed preference; risk preferences; CHOICE; PARTICIPATION; SALIENCE; gets

摘要

Individuals face nonlinear incentives in myriad situations. We test a fundamental assumption in such settings: that individuals display stable preferences when facing linear and nonlinear incentives. We use a laboratory experiment to characterize how revealed preferences are affected by changes in the budget set environment. Choices under kinked budgets exhibit the same very high levels of internally consistent behavior as they do under linear budgets. However, for about half the subjects, choices across settings are inconsistent with the maximization of a stable preference. Subjects displaying arbitrary consistency exhibit large and significant changes in utility parameters, risk premiums, and price elasticities across settings. ( JEL C91, D12, D81, D91) )