CeDEx Brown Bag Seminar - Geoffrey Castillo

Title: Similarity and social discounting

Abstract: Social discounting refers to the idea that decision-makers discount payoffs as a function of social distance. We introduce a method to measure social distance using interpersonal similarity; that is, how similar or different others are to the decision-maker. We use data from our own preregistered experiments as well from an existing, independently conducted, lab-in-the-field experiment to estimate the structural parameters of social discounting and find evidence for it. Our experiments control for competing explanations to isolate the effect of similarity and thus show that people have a preference for more similar others. Our estimates imply that in order for a decision-maker to willingly forgo $1 and have it instead benefit a dissimilar other, then it would need to increase to at least $1.25. We also find evidence for quasi-hyperbolic social discounting.

The paper is joint with Benjamin Beranek and is available at https://geoffreycastillo.com/pdf/Beranek,Castillo-Similarity-and-social-discounting.pdf