Framing Effects in Intertemporal Choices: 3 Two‐Step Experiments

Abstract

ABSTRACTFramings may affect individuals' choices. In particular, the perception of (implicit) risks and their costs may influence intertemporal choices. In a between‐subjects experimental design, participants are presented choices either in a standard (i.e., current vs. future payoffs), penalty (i.e., the same as before, presenting the differences between present and future amounts as losses), future‐improved (i.e., increasing by 35% the future payoff with respect to the standard frame) or penalty present‐improved way (i.e., with small differences between present and future amounts). Undergraduate students participated in 3 two‐step experiments. The results show that the negative and the present‐improved frames render the participants more patient and subjects who are trained to be more farsighted using a penalty decision problem continue to be patient in subsequent classical formulations where that specific attribute is no longer present.