Abstract

This study experimentally tests our proposed extended present bias hypothesis—discount factor increases over the proximate future and eventually approaches constancy, but remains distinct from unity in the remote future. Using front-end delay and a post-dated check for payment, discount factors are elicited for three seven-day durations: between 2 and 9 days later, between 31 and 38 days later, and between 301 versus 308 days later. We find support for diminishing discounting between the proximate and intermediate comparisons, but not between the intermediate and the remote comparisons. The findings validate our extended present bias hypothesis.