I rented the documentary first, but I want to watch the comedy now

Description

We report on a field study demonstrating systematic differences between the preferences people anticipate they will have over a series of options in the future and their subsequent revealed preferences over those options. Using a novel panel data set, we analyze the film rental and return patterns of a sample of online DVD rental customers over a period of four months. We predict and find that people are more likely to rent DVDs in one order and return them in the reverse order when should DVDs (e.g., documentaries) are rented before want DVDs (e.g., action films). This effect is sizeable in magnitude, with a one standard deviation change in the difference between sequentially rented films' standardized rankings on a scale from the most extreme want to the most extreme should movie increasing the odds of a preference reversal by 10%. Similarly, we also predict and find that should DVDs are held significantly longer than want DVDs. Our study ties together the previously disjoint literatures on intrapersonal conflict and hyperbolic discounting and shows in the field that the impact of intrapersonal conflict can be large in magnitude.

Subjects

Series Statement

• Working paper / Harvard Business School -- 07-099