I'll have the ice cream soon and the vegetables later

Description

How do decisions made for tomorrow or two days in advance differ from decisions made for several days in the future? Most economic models predict that decisions do not systematically differ on such short timescales. We use a novel panel data from an online grocer to conduct analyses suggesting that people are decreasingly impatient the further in the future their choices will take effect. In general, as the delay between order completion and delivery increases, we find that the same customers spend less, order a higher percentage of "should" items (e.g., vegetables), and order a lower percentage of "want" items (e.g., ice cream). However, orders placed for delivery tomorrow versus two days in the future do not show this want/should pattern, and we briefly discuss survey results suggesting a potential explanation for the nonlinearity in customers' apparent decreasing impatience.

Description

How do decisions made for tomorrow or two days in advance differ from decisions made for several days in the future? We use novel panel data from an online grocer to address this question. In general, we find that as the delay between order completion and delivery increases, grocery customers spend less, order a higher percentage of "should" items (e.g., vegetables), and order a lower percentage of "want" items (e.g., ice cream) controlling for customer fixed effects. However, orders placed by a customer for delivery tomorrow versus two days in the future do not show this want/should pattern, and we briefly discuss survey results suggesting a potential explanation for this.

Subjects

Series Statement

• Working paper / Harvard Business School -- 07-078

Other Editions

• I'll have the ice cream soon and the vegetables later: decreasing impatience over time in online grocery ordersHarvard Business School2007-01-01
• I'll have the ice cream soon and the vegetables laterHarvard Business School2008