Time and risk preferences of individuals, married couples and unrelated pairs

Humans make intertemporal decisions under uncertainty as individuals and in groups. Time and risk preferences are well studied in the context of individual decision-making, but much less attention has been paid to contexts of group decision-making, particularly married adults. Married couples often make important decisions jointly, such as decisions about household finances or children's education. We elicit the preferences of individuals, married couples, and unrelated pairs in an incentivized field experiment. By contrasting the choices of married couples and unrelated pairs of adults, we also shed light on whether divergences in choices between individuals and couples arise from attributes intrinsic to the married pair or from a “group effect”. We find that the decisions of both individuals and pairs are best characterized by rank-dependent utility with risk aversion and optimistic attitudes towards probabilities, high discount rates, and no present bias. The joint decisions of married couples and unrelated pairs exhibit more impatience than the constituent individuals’ decisions and this difference is similar for both types of pairs, implying only a “group effect” on time preferences. In contrast, the risk preferences of married couples and unrelated pairs are similar to the preferences of their constituent individuals.