Weighing Outcomes by Time or Against Time? Evaluation Rules in Intertemporal Choice

Cognitive Science 38 (3):399-438 (2014)

Abstract
Models of intertemporal choice draw on three evaluation rules, which we compare in the restricted domain of choices between smaller sooner and larger later monetary outcomes. The hyperbolic discounting model proposes an alternative-based rule, in which options are evaluated separately. The interval discounting model proposes a hybrid rule, in which the outcomes are evaluated separately, but the delays to those outcomes are evaluated in comparison with one another. The tradeoff model proposes an attribute-based rule, in which both outcomes and delays are evaluated in comparison with one another: People consider both the intervals between the outcomes and the compensations received or paid over those intervals. We compare highly general parametric functional forms of these models by means of a Bayesian analysis, a method of analysis not previously used in intertemporal choice. We find that the hyperbolic discounting model is outperformed by the interval discounting model, which, in turn, is outperformed by the tradeoff model. Our cognitive modeling is among the first to offer quantitative evidence against the conventional view that people make intertemporal choices by discounting the value of future outcomes, and in favor of the view that they directly compare options along the time and outcome attributes
Keywords Mathematical modeling  Hyperbolic discounting  Psychology  Intertemporal choice  Decision making  Human experimentation
Categories (categorize this paper)
DOI 10.1111/cogs.12104
Options
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive


Upload a copy of this paper     Check publisher's policy     Papers currently archived: 47,283
Through your library

References found in this work BETA

Bidding on the Future: Evidence Against Normative Discounting of Delayed Rewards.Kris N. Kirby - 1997 - Journal of Experimental Psychology: General 126 (1):54-70.

View all 11 references / Add more references

Citations of this work BETA

Cumulative Weighing of Time in Intertemporal Tradeoffs.Marc Scholten, Daniel Read & Adam Sanborn - 2016 - Journal of Experimental Psychology: General 145 (9):1177-1205.

Add more citations

Similar books and articles

Analytics

Added to PP index
2014-01-12

Total views
18 ( #516,197 of 2,290,783 )

Recent downloads (6 months)
3 ( #402,846 of 2,290,783 )

How can I increase my downloads?

Downloads

My notes

Sign in to use this feature