Preferences over wealth: Experimental evidence

Preferences over wealth are a channel to explain why households in the aggregate less responsive when real interest rates fall. Following such preferences, they save more than would be optimal standard model. However, little is known about preferences empirically. We run an intentionally simple lab experiment on intertemporal spending and saving decisions with 180 students. Under positive discount factor, zero linear utility, maximizing behaviour imply any funds instantaneously. While half of participants behave optimally, we find robust pattern where average form maintain stock wealth, consistent entering utility function directly.