Work

Remembering past present biases

Year: 2025

Type: article

Abstract: This study examines a potential link between present bias and reduced memory accuracy in intertemporal decision-making. In a classroom experiment with university students, participants made choices between smaller-sooner and larger-later rewards on two occasions. The second time included an immediate option, tempting present-biased participants to choose the immediate reward. During a third visit, participants were randomized into two groups and asked to recall their decisions from one of the previous visits. The results show that participants with present bias had lower memory accuracy than their time-consistent peers in situations involving immediate rewards. Regression analysis indicates that this reduced accuracy is consistent with motivated misremembering – in which individuals recall their past decisions as more virtuous than they actually were. Robustness checks reveal that time inconsistency is positively associated with lower memory accuracy in general, but present-biased participants exhibit clearly distinct patterns compared to their future-biased counterparts. These results are weighed against alternative explanations, notably the possibility of noisy cognition.

Source: Journal of Behavioral and Experimental Economics

DOI: 10.1016/j.socec.2025.102484

Authors: Barna Bakó, Antal Ertl, Hubert János Kiss

Institutions: Corvinus University of Budapest, Institute for Transport Sciences, Institute of Economics

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,830

Funders: Magyar Tudományos Akadémia, Emberi Eroforrások Minisztériuma