American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Dynamic Preference "Reversals" and Time Inconsistency
American Economic Journal: Microeconomics
(pp. 426–68)
Abstract
We study the possibility of identifying time-inconsistent preferences in empirical designs where preferences are elicited in advance at time 0 and then again at time 1, after the agent receives additional information. For single-peaked preferences, time consistency is rejected only when the time-1 ranking between a pair of alternatives is always the reverse of the time-0 ranking. We establish variations and generalizations of this result. Since such stark reversals are rarely observed, choice-revision designs require stronger identification assumptions than perhaps previously appreciated. But we show that time inconsistency is identifiable in environments where preferences over alternatives can be "priced out."Citation
Strack, Philipp, and Dmitry Taubinsky. 2026. "Dynamic Preference "Reversals" and Time Inconsistency." American Economic Journal: Microeconomics 18 (2): 426–68. DOI: 10.1257/mic.20230120Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D15 Intertemporal Household Choice; Life Cycle Models and Saving
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D86 Economics of Contract: Theory