Regular Consistent Preferences

Abstract

In a dynamic choice environment, an agent's tastes may change over time, leading to a conflict between plans made today and choices made in the future. In response, a consistent planner restricts herself to plans that she will actually follow, by anticipating today how she will rank continuation plans in the future. Since the agent's expected future rankings often play an important role in policy analysis, they need to be elicited from observable choices. In this paper, we provide a method to elicit expected future rankings by considering the agent's preferences today over dynamic decision problems. Our identification strategy exploits that, in many applications of the consistent planning model, future rankings are monotone with respect to a partial order, which provides an unambiguous ranking of some alternatives. Our results are developed in a general framework, and can therefore be used to elicit expected future rankings in many applications of the consistent planning model. To illustrate our findings, we consider a dynamic consumption problem with quasi-hyperbolic discounting, and show how the agent's expectations about her present-bias in the future can be elicited from simple choice experiments today.