Economics Research Seminar
A History of Violence: Field Evidence on Trauma, Discounting and Present Bias
Sponsored by: Economics Department
Speaker(s): Alex Imas, Ph.D., Carnegie Mellon University
Date & Time: Monday, Sep. 28, 2015 from 2 p.m. to 3:30 p.m.
The extent to which individuals discount the future and whether they discount in a time-consistent fashion is an important determinant of their life outcomes. Prior work shows a weak (Voors et al. 2012) or insignificant (Bchir and Willinger, 2013) effect of trauma on time preferences. However, these studies offered choices between rewards that all lay in the future, and hence could not identify an impact on impulsivity – the tendency to choose a smaller reward available immediately over a larger, later reward. In this paper, we partnered with a grocery store near an area of active conflict in the Democratic Republic of Congo that offered a unique opportunity to identify the effects of exposure to violence on impulsivity. In contrast to prior work, we find that direct exposure to violence had a large and significant effect on impulsivity: exposed individuals chose the smaller reward nearly twice as often when it was available immediately than unexposed individuals. We also demonstrate that providing individuals with a delay between information about the choice and the choice itself mitigates the differences in behavior between exposed and unexposed groups. Our findings suggest that enforcing a cooling off period between income notification and consumption opportunities may help generate more patient choices and mitigate elevated impulsivity. Our results have implications for policies aimed at alleviating the deleterious effects of present bias and the role of deliberation in the structure of commitment contracts.
Please join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
Peter B. Lewis Building
11119 Bellflower Road, Room 220
Cleveland, OH 44106-7235
Attachment: A History of Violence
Weatherhead School of Management at Case Western Reserve University cultivates creativity, innovation, and purpose-driven leadership to design a better world.