Paid and hypothetical time preferences are the same: Lab, field and online evidence

The use of real decision-making incentives remains under debate after
decades of economic experiments. In time preferences experiments involving
future payments, real incentives are particularly problematic due to
between-options differences in transaction costs, among other issues. What
if hypothetical payments provide accurate data which, moreover, avoid
transaction cost problems? In this paper, we test whether the use of
hypothetical or one-out-of-ten-participants probabilistic—versus
real—payments affects the elicitation of short-term and long-term
discounting in a standard multiple price list task. We analyze data from a
lab experiment in Spain and well-powered field and online experiments in
Nigeria and the UK, respectively (N = 2,043). Our results indicate that
the preferences elicited using the three payment methods are mostly the
same: we can reject that either hypothetical or one-out-of-ten payments
change any of the four preference measures considered by more than 0.18 SD
with respect to real payments.