We introduce, test, and compare two auction-based methods for eliciting discount rates. In these “patience auctions”, participants bid the smallest future sum they would prefer -or- the longest time they would wait for a reward, rather than receive a smaller, immediate payoff. The most patient bidder receives the delayed reward; all others receive the immediate payoff. These auctions allow us to compare discounting when participants’ attention is focused on the temporal versus monetary dimension of delayed rewards. We find that the estimated parameters in the three most commonly used discount functions (exponential, hyperbolic, and quasi-hyperbolic) differ across these two bidding methods (time-bids vs. money-bids). Specifically, our participants tend to show more impatience under time-bids. Furthermore, we find that people are more likely to exhibit exponential (as opposed to hyperbolic) discounting and exhibit less present bias under time-bids, compared to money-bids. To our knowledge, this paper is the first to directly compare time versus money preference elicitations, within the same subjects, using an incentive-compatible mechanism.

Pain is a highly salient and attention-demanding experience that motivates people to act. We investigated the effect of pain on decision making by delivering acute thermal pain to participants’ forearm while they made risky and intertemporal choices involving money. Participants (n = 107) were more risk seeking under pain than in a no-pain control condition when decisions involved gains but not when they involved equivalent losses. Pain also resulted in greater preference for immediate (smaller) over future (larger) monetary rewards. We interpret these results as a motivation to offset the aversive, pain-induced state, where monetary rewards become more appealing under pain than under no pain and when delivered sooner rather than later. Our findings add to the long-standing debate regarding the role of intuition and reflection in decision making.

Using a unique experimental subject pool, I analyse the behaviour of subjects in a life-cycle consumption experimental task. As in previous experiments, it is clear that different subjects solve the task differently - some having strategies close to the fully optimal and others using simple heuristics. The nature of my subject pool enables me to see if there is any link between the strategies employed by the subjects and their demographic characteristics. I also explore whether the parameters in the task influence the chosen strategy. I find little systematic demographic influence. The results of the paper have an important message concerning the representativeness of typical subject pools used in economics experiments.

Many people struggle to make tradeoffs between present wants and future wishes, resulting in the tendency to overly discount the value of future rewards. To explain such behavior, past work has pointed to future self-continuity or the perceived connection between a person’s current and future selves. Yet, most of this past work has been conducted on small-to-medium size convenience samples, and as such, little is known regarding the population-level statistics of future self-continuity or how its link to important financial health variables like saving behavior and financial well-being play out in a nationally representative sample. Here, we use a nationally representative sample of over 6,000 Americans to investigate the generalizability of future self-continuity and its connection to financial outcomes such as savings behavior and global financial well-being. We also examine the strength of these associations in the face of a host of other relevant constructs. Overall, this research replicates and extends existing work on the relationship between future self-continuity and financial decision-making among a representative population, and sheds further insight on its potential implications for interventions aimed at enhancing long-term financial well-being.

The famous linguistic-savings hypothesis states that languages that grammatically separate the future from the present (like English) causally induce less future-oriented behavior than languages in which speakers can refer to the future using present tense (like German or Chinese). Chen et al., European Economic Review 120 (2019) experimentally investigate the effect of using future-oriented language on incentivized intertemporal choices and find no support for the hypothesis. We replicate Chen et al., European Economic Review 120 (2019)’s study in the German-speaking context. In our experiment with 332 subjects, we randomly refer to future payments using present or future tense and find no causal effect of language on intertemporal choice. Given the importance of replications for confidence in scientific findings, our results provide corroborating evidence that the linguistic-savings hypothesis is not empirically tenable. Eventually, the results provide a methodological contribution to the conduct of experiments.

In intertemporal and risky choice decisions, parametric utility models are widely used for predicting choice and measuring individuals’ impulsivity and risk aversion. However, parametric utility models cannot describe data deviating from their assumed functional form. We propose a novel method using cubic Bezier splines (CBS) to flexibly model smooth and monotonic utility functions that can be fit to any dataset. CBS shows higher descriptive and predictive accuracy over extant parametric models and can identify common yet novel patterns of behavior that are inconsistent with extant parametric models. Furthermore, CBS provides measures of impulsivity and risk aversion that do not depend on parametric model assumptions.

Most research on intertemporal choice has examined choices between smaller, sooner gains and larger, later gains. A much smaller number of papers have examined intertemporal choices for losses. In this article, we explore whether mixed-sign choices with both gains and losses may better correlate with real-world behaviors. In two high-powered studies (pilot: N = 3,200; main study: N = 7,000), participants completed one of four normatively equivalent measures consisting of pure gain, pure loss, or mixed sign (Gain-Now-Loss-Later or Loss-Now-Gain-Later) intertemporal choices. Participants also self-reported a large number of demographic measures and real-world choice behaviors thought to be linked to intertemporal choice. The results indicate that (1) mixed-sign intertemporal choices yield more patient time preferences than pure-gain choices but less patient than pure-loss choices and (2) pure-gain intertemporal choices yield equivalent or superior predictive power across a range of real-world intertemporal choice behaviors.

We often forego a larger future reward in order to obtain a smaller reward immediately, known as impatient intertemporal choice. The current study investigated the role of Pavlovian-to-instrumental transfer (PIT) as a mechanism contributing to impatient intertemporal choice, following a theoretical framework proposing that cues associated with immediate gratification trigger a Pavlovian approach response, interfering with goal-directed (instrumental) inhibitory behavior. We developed a paradigm in which participants first learned to make instrumental go/no-go responses in order to win rewards and avoid punishments. Next, they learned the associations between Pavlovian cues and rewards varying in amount and delay. Finally, we tested whether these (task-irrelevant) cues exerted transfer effects by influencing instrumental actions while participants again completed the go/no-go task. Across two experiments, Pavlovian cues associated with larger (versus smaller) and immediate (versus delayed) rewards were evaluated more positively, reflecting the successful acquisition of Pavlovian cue–outcome associations. These findings replicated the previously reported classical transfer effect of reward amount on instrumental behavior, as large (versus smaller) cues increased instrumental approach. In contrast, we found no evidence for the hypothesized transfer effects for reward delay, contrary to the proposed role of PIT in impatient intertemporal choice. These results suggest that although both reward amount and delay were important in the evaluation of cues, only the amount associated with cues influenced instrumental choice. We provide concrete suggestions for future studies, addressing instrumental outcome identity, competition between cue–amount and cue–delay associations, and individual differences in response to Pavlovian cues.

Delay discounting—the extent to which individuals show a preference for smaller immediate rewards over larger delayed rewards—has been proposed as a transdiagnostic neurocognitive process across mental health conditions, but its examination in relation to posttraumatic stress disorder (PTSD) is comparatively recent. To assess the aggregated evidence for elevated delay discounting in relation to posttraumatic stress, we conducted a meta-analysis on existing empirical literature. Bibliographic searches identified 209 candidate articles, of which 13 articles with 14 independent effect sizes were eligible for meta-analysis, reflecting a combined sample size of N = 6897. Individual study designs included case-control (e.g. examination of differences in delay discounting between individuals with and without PTSD) and continuous association studies (e.g. relationship between posttraumatic stress symptom severity and delay discounting). In a combined analysis of all studies, the overall relationship was a small but statistically significant positive association between posttraumatic stress and delay discounting (r = .135, p < .0001). The same relationship was statistically significant for continuous association studies (r = .092, p = .027) and case-control designs (r = .179, p < .001). Evidence of publication bias was minimal. The included studies were limited in that many did not concurrently incorporate other psychiatric conditions in the analyses, leaving the specificity of the relationship to posttraumatic stress less clear. Nonetheless, these findings are broadly consistent with previous meta-analyses of delayed reward discounting in relation to other mental health conditions and provide further evidence for the transdiagnostic utility of this construct.

Commitment contracts are a strategy for binding self-control failures, such as skipping a gym visit or breaking a dieting regime, to monetary penalties. Despite evidence that commitment contracts with stronger penalties improve self-control, they are relatively underused. Across 5 experiments, we find that decision makers are less likely to select commitment contracts with more severe penalties (i.e., anti-charity contracts) for themselves than they are for others. This self-other difference in contract choice arises because decision makers believe anti-charity contracts will be more effective for others than for themselves. Our results suggest that people recognize the potential effectiveness of using more aggressive commitment contracts to overcome self-control problems, but view themselves as an exception to that general rule.

The degree to which individuals prefer smaller sooner versus larger delayed rewards serves as a powerful predictor of their impulsivity towards a number of different kinds of rewards. Here we test the limits of its predictive ability within a variety of cognitive and social domains. Across several large samples of subjects, individuals who prefer smaller more immediate rewards (steeper discounters) are less reflective (or more impulsive) in their choices, preferences, and beliefs. First, steeper discounters used more automatic, less controlled choice strategies, giving more intuitive but incorrect responses on the Cognitive Reflection Test (replicating previous findings); employing a suboptimal probability matching heuristic for a one-shot gamble (rather than maximizing their probability of reward); and relying less on optimal planning in a two-stage reinforcement learning task. Second, steeper discounters preferred to consume information that was less complex and multi-faceted, as suggested by their self-reported Need for Cognitive Closure, their use of short-form social media (i.e., Twitter), and their preferred news sources (in particular, whether or not they preferred National Public Radio over other news sources). Third, steeper discounters had interpersonal and religious beliefs that are associated with reduced epistemic complexity: they were more likely to believe that the behavior of others could be explained by fixed rather than dynamic factors, and they believed more strongly in God and in the afterlife. Together these findings provide evidence for a link between individual differences in temporal discounting for monetary rewards and preferences for the path of least resistance (less reflective and/or more automatic modes of processing) across a variety of domains.

Similar to research on risky choice, the traditional analysis of intertemporal choice takes the view that an individual behaves so as to maximize the discounted sum of all future utilities. The well-known Allais paradox contradicts the fundamental postulates of maximizing the expected value or utility of a risky option. We describe a violation of the law of diminishing marginal utility as well as an intertemporal version of the Allais paradox.

People tend to prefer smaller and sooner (SS) rewards over larger and later (LL) ones even when the latter are much larger. Previous research have identified several ways to enhance people’s patience. Adding to this literature, the current paper demonstrates that introduction of upfront losses as well as gains to both SS and LL rewards can decrease people’s impatience. This effect is incompatible with both the normative exponential and descriptive hyperbolic discounting models, which agree on the additive assumption and the independence assumption. We also exculde the integration explanation which assumes subjects integrate upfront money with final rewards and make a decision with bottom line at the end. We consider several possible explanations, including the salience hypothesis, which states that introducing upfront money makes the money dimension more salient than not and thus increases the attractiveness of LL options.

Revealed preference is the dominant approach for inferring preferences, but it is limited in that it relies solely on discrete choice data. When a person chooses one alternative over another, we cannot infer the strength of their preference or predict how likely they will be to make the same choice again. However, the choice process also produces response times (RTs), which are continuous and easily observable. It has been shown that RTs often decrease with strength-of-preference. This is a basic property of sequential sampling models such as the drift diffusion model. What remains unclear is whether this relationship is sufficiently strong, relative to the other factors that affect RTs, to allow us to reliably infer strength-of-preference across individuals. Using several experiments, we show that even when every subject chooses the same alternative, we can still rank them based on their RTs and predict their behavior on other choice problems. We can also use RTs to predict whether a subject will repeat or reverse their decision when presented with the same choice problem a second time. Finally, as a proof-of-concept, we demonstrate that it is also possible to recover individual preference parameters from RTs alone. These results demonstrate that it is indeed possible to use RTs to infer preferences.

Recent research has shown that risk and reward are positively correlated in many environments, and that people have internalized this association as a “risk-reward heuristic”: when making choices based on incomplete information, people infer probabilities from payoffs and vice-versa, and these inferences shape their decisions. We extend this work by examining people’s expectations about another fundamental trade-off — that between monetary reward and delay. In 2 experiments (total N = 670), we adapted a paradigm previously used to demonstrate the risk-reward heuristic. We presented participants with intertemporal choice tasks in which either the delayed reward or the length of the delay was obscured. Participants inferred larger rewards for longer stated delays, and longer delays for larger stated rewards; these inferences also predicted people’s willingness to take the delayed option. In exploratory analyses, we found that older participants inferred longer delays and smaller rewards than did younger ones. All of these results replicated in 2 large-scale pre-registered studies with participants from a different population (total N = 2138). Our results suggest that people expect intertemporal choice tasks to offer a trade-off between delay and reward, and differ in their expectations about this trade-off. This “delay-reward heuristic” offers a new perspective on existing models of intertemporal choice and provides new insights into unexplained and systematic individual differences in the willingness to delay gratification.

Previous research has focused on studying the endowment effect for transactions that take place in the present. Many real-world transactions, however, are delayed into the future (i.e., people agree to buy or sell, but the actual transaction does not materialize until a later time). Here we investigate how transaction timing affects the endowment effect. In five studies, we show that the endowment effect systematically increases as transactions are delayed into the future. Specifically, buying prices significantly decrease as the transaction is delayed, while selling prices remain constant, resulting in an amplified endowment effect (Experiment 1). This pattern is not produced by a discounting of the money involved in the transaction (Experiment 2), and it holds across different types of items (Experiment 3). We also show that the phenomenon cannot be explained by sellers anticipating becoming increasingly attached to the items over time (Experiment 4). Finally, we demonstrate that this increased endowment effect in the future holds in the field, in the context of a real market and with real transactions (Experiment 5).

We examine how adding an Attractive but Unattainable Alternative (AUA) to a set of available but less attractive alternatives influences evaluations of near vs. distant future sets of alternatives. According to Construal Level Theory (Liberman & Trope, 2008) including an AUA would decrease the attractiveness of near future sets, but may increase the attractiveness of distant future sets. In four studies participants imagined a choice situation with three alternatives. For some participants a fourth alternatives was added, which was attractive but unattainable. Half of the participants in each condition imagined making a decision in the near future whereas others imagined making the decision in the distant future. Participants then evaluated the attractiveness of the entire set of alternatives, as well as of each alternative separately. We examined choices between jobs, computers and roommates. The last study examined negotiations with the landlord about an apartment. Consistent with our hypothesis, an AUA increased the evaluation of the distant set and decreased the evaluation of the near set.

Executing an important decision can be as easy as moving a mouse cursor or reaching towards the preferred option with a hand. But would we decide differently if choosing required walking a few steps towards an option? More generally, is our preference invariant to the means and motor costs of reporting it? Previous research demonstrated that asymmetric motor costs can nudge the decision-maker towards a less costly option. However, virtually all traditional decision-making theories predict that increasing motor costs symmetrically for all options should not affect choice in any way. This prediction is disputed by the theory of embodied cognition, which suggests that motor behavior is an integral part of cognitive processes, and that motor costs can affect our choices. In this registered report, we investigated whether varying motor costs can affect response dynamics and the final choices in an intertemporal choice task: choosing between a readily available small reward and a larger but delayed reward. Our study compared choices reported by moving a computer mouse cursor towards the preferred option with the choices executed via a more motor costly walking procedure. First, we investigated whether relative values of the intertemporal choice options affect walking trajectories in the same way as they affect mouse cursor dynamics. Second, we tested a hypothesis that, in the walking condition, increased motor costs of a preference reversal would decrease the number of changes-of-mind and therefore increase the proportion of impulsive, smaller-but-sooner choices. We confirmed the hypothesis that walking trajectories reflect covert dynamics of decision making, and rejected the hypothesis that increased motor costs of responding affect decisions in an intertemporal choice task. Overall, this study contributes to the empirical basis enabling the decision-making theories to address the complex interplay between cognitive and motor processes.

Mathematical and computational decision models are powerful tools for studyingchoice behavior, and hundreds of distinct decision models have been proposedover the long interdisciplinary history of decision making research. Theexistence of so many models has led to theoretical fragmentation and redundancy,obscuring key insights into choice behavior, and preventing consensus about theessential properties of preferential choice. We provide a synthesis of formalmodels of risky, multiattribute, and intertemporal choice, three importantdomains in decision making. We identify recurring insights discovered byscholars of different generations and different disciplines across these threedomains, and use these insights to classify over 150 existing models asinvolving various combinations of eight key mathematical and computationalproperties. These properties capture the main avenues of theoretical developmentin decision making research and can be used to understand the similarities anddifferences between decision models, aiding both theoretical analyses andempirical tests.

In this investigation, we test whether temporal discounting is domain-specific (i.e., compared to other people, can an individual have a relatively high discount rate for one type of reward but a relatively low discount rate for another?), and we examine whether individual differences in the types of rewards one finds tempting explain domain-specificity in discount rates. Adults discounted delayed rewards they found particularly tempting (defined as the visceral attraction to and enjoyment of a reward) more steeply than did adults who did not find the rewards as tempting, contrary to what might be expected from the magnitude effect. Furthermore, we found significant group by domain interactions (e.g., chip lovers who do not like beer have relatively high discount rates for chips and relatively low discount rates for beer, whereas beer lovers who do not like chips showed the opposite pattern). These results suggest that domain-specificity in temptation partially accounts for corresponding domain-specificity in temporal discounting.