Scholten, Marc, Read, Daniel and Sanborn, Adam N. (2016) Cumulative weighing of time in intertemporal tradeoffs. Journal of Experimental Psychology: General, 145 (9). pp. 1177-1205. doi:10.1037/xge0000198

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Abstract

We examine preferences for sequences of delayed monetary gains. In the experimental literature, two prominent models have been advanced as psychological descriptions of preferences for sequences. In one model, the instantaneous utilities of the outcomes in a sequence are discounted as a function of their delays, and assembled into a discounted utility of the sequence. In the other model, the ccumulated utility of the outcomes in a sequence is considered along with utility or disutility from improvement in outcome utilities and utility or disutility from the spreading of outcome utilities. Drawing on three threads of evidence concerning preferences for sequences of monetary gains, we propose that the accumulated utility of the outcomes in a sequence is traded off against the duration of utility accumulation. In our first experiment, aggregate choice behavior provides qualitative support for the tradeoff model. In three subsequent experiments, one of which incentivized, disaggregate choice behavior provides quantitative support for the tradeoff model in Bayesian model contests. The third experiment addresses one thread of evidence that motivated the tradeoff model: When, in the choice between two single dated outcomes, it is conveyed that receiving less sooner means receiving nothing later, preference for receiving more later increases, but when it is conveyed that receiving more later means receiving nothing sooner, preference is left unchanged. Our results show that this asymmetric hidden-zero effect is indeed driven by those supporting the tradeoff model. The tradeoff model also accommodates all remaining evidence on preferences for sequences of monetary gains.

Item Type:	Journal Article
Subjects:	B Philosophy. Psychology. Religion > BF Psychology H Social Sciences > HF Commerce Q Science > QA Mathematics
Divisions:	Faculty of Science > Psychology
Library of Congress Subject Headings (LCSH):	Delay discounting (Psychology), Sequences (Mathematics) , Conjoint analysis (Marketing)
Journal or Publication Title:	Journal of Experimental Psychology: General
Publisher:	American Psychological Association
ISSN:	0096-3445
Official Date:	1 September 2016
Dates:	Date Event 1 September 2016 Published 20 May 2016 Accepted 17 September 2015 Submitted
Volume:	145
Number:	9
Number of Pages:	93
Page Range:	pp. 1177-1205
DOI:	10.1037/xge0000198
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access
RIOXX Funder/Project Grant:	Project/Grant ID RIOXX Funder Name Funder ID PTDC/ MHC-PCN/3805/2012 Fundação para a Ciência e a Tecnologia UNSPECIFIED ES/K002201/1 [ESRC] Economic and Social Research Council http://dx.doi.org/10.13039/501100000269 RP2012-V-022 Leverhulme Trust http://dx.doi.org/10.13039/501100000275 ES/K004948/1 [ESRC] Economic and Social Research Council http://dx.doi.org/10.13039/501100000269

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