Intertemporal Decisions Research Articles

Untying the Knot: How Child Support and Alimony Affect Couples’ Dynamic Decisions and Welfare

Abstract In many countries, divorce law mandates post-marital maintenance payments (child support and alimony) to insure the lower earner in married couples against financial losses upon divorce. This paper studies how maintenance payments affect couples’ intertemporal decisions and welfare. I develop a dynamic model of family labor supply, home production, savings, and divorce and estimate it using Danish register and survey data. The model captures the policy tradeoff between providing insurance to the lower earner and enabling couples to specialize efficiently, on the one hand, and maintaining labor supply incentives for divorcees, on the other hand. I use the estimated model to study various counterfactual policy scenarios. I find that alimony comes with more substantial labor supply disincentives compared to child support payments and is less efficient in providing consumption insurance. The welfare maximizing policy, within the status quo policy space, involves increasing child support and reducing alimony payments. My results show that Pareto improvements beyond this welfare maximizing policy are feasible, highlighting limitations of how child support and alimony policies are commonly implemented.

The impact of pandemic threats on intertemporal choices in Chinese and Americans

Intertemporal decisions are crucial to survival, especially when humans are exposed to ecological threats. However, it remains unclear whether and how pandemic threats impact intertemporal choices across cultures. We conducted two studies in two cultural contexts (N = 1180). Study 1a found that Chinese who perceived more pandemic threats showed higher temporal discounting rates (i.e., preferred immediate smaller over delayed larger rewards), and this relationship was mediated by negative emotions. Study 1b, using threat priming, revealed that Chinese participants primed with a high-threat condition (depicting a pandemic threat) showed higher temporal discounting rates compared to those primed with a low-threat condition (describing the flu). Differently, Study 2a revealed that perceived pandemic threat levels of Americans did not directly predict temporal discounting rates. Using similar threat priming, Study 2b further confirmed that Americans in the high-threat priming condition showed no significant differences in temporal discounting rates compared to those in the low-threat priming condition. The current research deepens the understanding of the cultural difference in the impact of pandemic threats on intertemporal decision-making and further informs the development of interventions that promote individual future-oriented thinking in the face of pandemics.

Development and validation of Intertemporal Decision-Making Ability Scale for early adolescents

ABSTRACT Objective Intertemporal decision-making ability refers to the ability of individuals to weigh costs and benefits at different time points and make choices, which is crucial for adolescents to resist temptation, improve self-control, and prospection. However, there are rarely studies that have been conducted to directly measure the intertemporal decision-making ability of adolescents. Method In this study, adolescents aged 9 to 15 years old were include to finish the measurement, and the intertemporal decision-making ability scale was developed based on three neural networks of intertemporal decision-making. After conducting the exploratory factor analysis, the final scale had 14 items in three dimensions. Results The results showed that the intertemporal decision-making ability scale for early adolescents contains three dimensions, namely, cognitive control, reward valuation, and prospection, with a total of 14 items. Conclusion The intertemporal decisionmaking ability scale developed in this study can effectively assess the intertemporal decisionmaking ability for early adolescents..

The Group Intertemporal Decision-Making Process.

Intertemporal decision making is the process by which individuals make judgments or choices regarding outcomes that occur at different times. Although intertemporal decision making is widely investigated, most studies explore it in terms of individual decision making, while neglecting group decision making, which holds more practical significance and adaptive value. This study recommends adopting a "two-process" approach that uses self-assessment questionnaires, audiovisual recordings, and visual decision-making tools to quantify interpersonal interaction processes and information processing in group intertemporal decision-making settings. In this way, studies can reveal the psychological and theoretical mechanisms of the group intertemporal decision-making process. At the level of interpersonal interaction processes, such an approach can identify the differential mechanisms between group and individual intertemporal decision making. In terms of information processing, it can reveal the mechanisms of the decision-making process in group intertemporal decision making. The findings of such work can provide a basis for interventions and nudges that encourage more visionary group intertemporal decision making.

The impact of anger on intertemporal decision-making in individuals with internet addiction: an fNIRS study.

Intertemporal decision-making is the choice between an immediate smaller reward (SS) and a delayed larger reward (LL). Intertemporal decision-making depends on the interaction of the cognitive and emotional systems, and the latter is particularly vital. According to the Appraisal Tendency Frame (ATF) theory, anger influences intertemporal decision-making by increasing an individual's sense of certainty and control. This study examined whether anger affects intertemporal decision-making in individuals with internet addiction (IA) in this manner and investigated its neural mechanisms. Nineteen individuals with IA and 20 healthy controls were recruited. All subjects performed the Monetary choice task under anger and neutral emotions while functional near-infrared spectroscopy (fNIRS) equipment simultaneously recorded the hemodynamics in the prefrontal cortex (PFC). Individuals with IA showed a more considerable delay discount and lower brain activations in the orbitofrontal cortex (OFC) and left dorsolateral prefrontal cortex (L-dlPFC) compared to HC. Moreover, individuals with IA made more LL choices in the angry condition than in the neutral emotion, yet there was no difference in HC. The brain activation in L-dlPFC of individuals with IA tends to increase in the angry condition compared to the neutral condition. These findings revealed that impairment of intertemporal decision-making in individuals with individuals with IA might be related to the dysfunction of OFC and L-dlPFC. Our work also provided initial footing for the applicability of the appraisal tendency frame theory to individuals with IA, and L-dlPFC might play a role in the effects of anger on intertemporal decision-making.

Intertemporal Decision-Making, Diabetes Self-Management, and Health Outcomes in Patients With Type 2 Diabetes.

The purpose of this study was to identify the independent factors associated with intertemporal decision-making and to examine its relationship with diabetes self-management behaviors, glucose variability, and diabetes complications in patients with diabetes. A cross-sectional study using convenience sampling (n = 368) was conducted in patients with type 2 diabetes (T2DM) between November 2021 and April 2023. Data were collected using self-reported questionnaires and retrieval of clinical information from medical records. Intertemporal decision-making was operationalized using delay discounting. The outcome variables included diabetes self-management behaviors, A1C, diabetic retinopathy, and carotid artery disease. Hierarchical regression and binary logistic regression models were used to explore the relationships among intertemporal decision-making, self-management, A1C, and carotid artery disease. The analyses showed that intertemporal decision-making was negatively associated with physical activity and carotid artery disease, in which individuals with lower delay discounting tended to have healthier physical activity; when the delay discounting rate increased 1 unit, the risk of the carotid artery disease increased by 39.8%. The study reveals that a lower delay discounting can promote healthier physical activity and decrease the incidence of carotid artery disease. These results offer new knowledge for researchers and clinicians to consider intertemporal decision-making in developing interventional programs to improve physical activity and reduce carotid artery complication in patients with T2DM when providing care.

Literature Review: A Study on the Influence of Emotions on Intertemporal Decision-Making

In recent years, with the integration and development of psychology and decision science, the research on the influence of emotions on intertemporal decision-making has increasingly emerged, forming a new academic trend. However, the current research in this field is still preliminary, and most of them focus on the revelation of phenomena, while few literatures directly analyze the complex mechanism between emotions and intertemporal decision-making. Therefore, in order to have a more comprehensive understanding of the psychological basis of intertemporal decision-making, and to guide people to use and control emotions more effectively in actual situations to achieve more satisfactory decision-making results, it is necessary to further explore the relationship between emotions and intertemporal decision-making. Such research can not only enrich the connotation of intertemporal decision-making theory, but also provide more scientific guidance for emotion management. This paper summarizes the previous research on the impact of emotion on intertemporal decision-making, and finds some current research areas and shortcomings, such as the lack of investigation of complex emotions, the lack of depth of research from the cognitive process itself, and the limitations of single-point results For example, to investigate the influence of dynamic emotions, daily emotions and complex emotions on intertemporal decision-making, and to make more attempts and explorations in emotional interventions.

Brain Stimulation of Dorsolateral Prefrontal Cortices Influences Impulsivity in Delay Discounting Choices.

Intertemporal decision-making is pivotal for human interests and health. Recently, studies instructed participants to make intertemporal choices for both themselves and others, but the specific mechanisms are still debated. To address the issue, in the current study, the cost-unneeded conditions (i.e., "Self Immediately - Self Delay" and "Other Immediately - Other Delay" conditions) and the cost-needed conditions (i.e., "Self Immediately - Other Delay" and "Self Delay - Other Immediately" conditions) were set with the identity of OTHER being a stranger. We manipulated the magnitude of reward (Experiment 1) and disrupted the activation of the dorsolateral prefrontal cortex with repetitive transcranial magnetic stimulation (rTMS; Experiment 2). We found that both the behavioral and rTMS manipulations increased smaller but sooner choice probability via reducing self-control function. The reduced self-control function elicited by rTMS affected both self- and other-related intertemporal choices via increasing the choice preference for smaller but sooner reward options, which may help people deeply understand the relationship between self- and other-related intertemporal choices in processing mechanism, especially when the OTHER condition is set as a stranger.

The perceived controllability of negatively-valenced episodic future thinking modulates delay discounting

ABSTRACT Intertemporal decision-making is important for both economy and physical health. Nevertheless, in daily life, individuals tend to prefer immediate and smaller rewards to delayed and larger rewards, which is known as delay discounting (DD). Episodic future thinking (EFT) has been proven to influence DD. However, there is still no inconsistent conclusion on the effect of negative EFT on DD. Considering the perceived controllability of negative EFT may address the issue (Controllability refers to the extent to which progress and result of an event could be controlled by ourselves). In the current study, we manipulated EFT conditions (baseline, neutral EFT, negative-controllable EFT and negative-uncontrollable EFT), delayed time (i.e. 1 week, 1 month, 3 months, 6 months, 1 year and 3 years) and reward magnitude (small, large). We mainly found that when experiencing negative-uncontrollable EFT compared to negative-controllable EFT in the delayed time of 6 months with large rewards, individuals chose more delayed rewards, suggesting that negative-uncontrollable EFT effectively reduced DD under conditions of both large-magnitude reward and longer delayed time. The current study provides new insight for healthy groups on optimising EFT. In that case, individuals are able to gain long-term benefits in financial management and healthcare.

Life is so Short, Future is so Long: The Relationship between Life History Strategies and People’s Metaphorical Perspectives on Time

Accruing evidence has attested to the plasticity of people’s metaphorical perspectives on the movement of events in time, which oscillate between the ego-moving perspective and the time-moving perspective contingent on, among others, perception of distance to the future by virtue of individual differences in lifestyle and personality. Building on and extending this avenue of inquiry, the current research investigated the relationship between life history strategy, another time-related construct, and the preferred perspective in the resolution of a temporally ambiguous question. Studies based on self-report (Study 1) and behavioral (Study 2) measures showed consistent results, such that individuals with a fast life history strategy and those who preferred the smaller-sooner reward tended to adopt the ego-moving perspective, whereas individuals with a slow life history strategy and those who preferred the larger-later reward tended to adopt the time-moving perspective. Examination of the priming effect of temporal perspectives on intertemporal decision-making revealed that differential perceptions of temporal distance underlay the strategy-time relationship (Study 3). Taken as a whole, the current findings suggested that individual differences in life history strategy may also influence people’s preferred perspective in the interpretation of ambiguous language related to time.

Analysis of the transmission of carbon taxes using a multi-sector DSGE

Carbon tax has attracted increasing attention as a means of curbing greenhouse gas (GHG) emissions. While the implementation of carbon taxes necessarily involves consideration of the impact across different sectors and different periods, most existing studies use models which do not provide a detailed account of either sectoral interaction or the dynamic nature of the responses of households and firms. To fill this gap, we construct a New Keynesian multi-sector dynamic stochastic general equilibrium (DSGE) model with an input–output structure of intermediate inputs and an investment network calibrated to Japan’s economy. We study the impact over time of carbon tax on different sectors, on aggregate GDP, and on GHG emissions. We then consider the long-term implications through a steady-state analysis, and the short- to medium-term implications by a simulation from 2020 to 2050, under various scenarios with different tax base compositions and announcement timings. We show that the impact on the trade-off between output and GHG emissions is importantly affected by inter-sectoral interactions among firms, and by the intertemporal decisions of households and firms. For example, an orderly implementation of carbon tax may mitigate a decline in value added of the most affected industry and the aggregate economy in 2050 by about 7% and 2% points, respectively, and contain an increase in the stock of GHG in 2050 by 3% points compared with the case of disorderly implementation. Also, keeping GHG emissions constant, GDP in 2050 can vary by 0.5% points depending on tax sources.

Pricing carbon in a multi-sector economy with social discounting

Economists tend to view a uniform emissions price as the most cost-effective approach to reducing greenhouse gas emissions. This paper scrutinizes the assumptions in general equilibrium which underlie the established view that uniform emissions pricing is optimal, focusing on economies where society values the well-being of future generations more than private actors. When social and private discount rates differ, we show that a uniform carbon price is optimal only under restrictive assumptions about technology homogeneity and intertemporal decision-making. Non-uniform pricing spurs capital accumulation and benefits future generations. Depending on sectoral heterogeneity in the substitutability between capital and energy inputs, we find that optimal carbon prices differ widely across sectors and yield substantial welfare gains relative to uniform pricing. Realizing these welfare gains, however, requires that the regulator has information on the technology heterogeneity across sectors. Differentiated carbon pricing based on imperfect estimates of technology heterogeneity can yield significant welfare losses.

The sign effect in temporal discounting does not require the hippocampus

When considering future outcomes, humans tend to discount gains more than losses. This phenomenon, referred to as the temporal discounting sign effect, is thought to result from the greater anticipated emotional impact of waiting for a negative outcome (dread) compared to waiting for a positive outcome (mixture of savoring and impatience). The impact of such anticipatory emotions has been proposed to rely on episodic future thinking. We evaluated this proposal by examining the presence and magnitude of a sign effect in the intertemporal decisions of individuals with hippocampal amnesia, who are severely impaired in their ability to engage in episodic mental simulation, and by comparing their patterns of choices to those of healthy controls. We also measured loss aversion, the tendency to assign greater value to losses compared to equivalent gains, to verify that any reduction in the sign effect in the hippocampal lesion group could not be explained by a group difference in loss aversion. Results showed that participants with hippocampal amnesia exhibited a sign effect, with less discounting of monetary losses compared to gains, that was similar in magnitude to that of controls. Loss aversion, albeit greater in the hippocampal compared to the control group, did not account for the sign effect. These results indicate that the sign effect does not depend on the integrity of hippocampally mediated episodic processes. They suggest instead that the impact of anticipatory emotions can be factored into decisions via semantic future thinking, drawing on non-contextual knowledge about oneself.

Exploring intertemporal decision-making dynamics through functional data analysis: investigating variations in different discount function's dimensions

AbstractIntertemporal preferences are closely related to essential aspects of an individual’s emotional and cognitive domains. Discount functions are used to quantify these preferences, which can help us understand conditions such as addiction, depression, and Attention Deficit Hyperactivity Disorder (ADHD). However, traditional parametric models are limited when dealing with intertemporal preferences, mainly when behavioural biases are involved. This study exploits Functional Data Analysis (FDA) to investigate the properties of discount functions in intertemporal choices comparing people suffering from the Hikikomori pathology (a condition that involves social withdrawal) and normal people. Notably, the goal of this research is to look for statistically significant differences in the dynamics of intertemporal decision-making according to different gravity of the Hikikomori condition through the magnified FDA lens on different functional dimensions; the distinctive curves of discount functions categorised by Hikikomori scores prompted a more profound investigation via the so-called augmented functional analysis of variance. The original curves and their derivatives, and the discount rates and their first derivatives provide the different functional dimensions explored. This original approach of analyzing differences between subgroups according to decision-making behaviours is exciting from a methodological and practical perspective.

Choice impulsivity after repeated social stress is associated with increased perineuronal nets in the medial prefrontal cortex

Repeated stress can predispose to substance abuse. However, behavioral and neurobiological adaptations that link stress to substance abuse remain unclear. This study investigates whether intermittent social defeat (ISD), a stress protocol that promotes drug-seeking behavior, alters intertemporal decision-making and cortical inhibitory function in the medial prefrontal cortex (mPFC). Male long evans rats were trained in a delay discounting task (DDT) where rats make a choice between a fast (1 s) small reward (1 sugar pellet) and a large reward (3 sugar pellets) that comes with a time delay (10 s or 20 s). A decreased preference for delayed rewards was used as an index of choice impulsivity. Rats were exposed to ISD and tested in the DDT 24 h after each stress episode, and one- and two-weeks after the last stress episode. Immunohistochemistry was performed in rat’s brains to evaluate perineuronal nets (PNNs) and parvalbumin GABA interneurons (PV) labeling as markers of inhibitory function in mPFC. ISD significantly decreased the preference for delayed large rewards in low impulsive, but not high impulsive, animals. ISD also increased the density of PNNs in the mPFC. These results suggest that increased choice impulsivity and cortical inhibition predispose animals to seek out rewards after stress.

The unified tradeoff model.

Evidence is steadily mounting that attribute-based models offer a more accurate description of intertemporal choices than traditional alternative-based models. Among the attribute-based models, the tradeoff model offers the broadest coverage of research findings, but at the cost of considerable complexity: There now are various instantiations of the model dealing with partially overlapping universes of choice options and preference patterns. Moreover, there are reports of preference patterns in intertemporal decisions about monetary losses that contradict all attribute-based models proposed so far. Taking stock of these core challenges, and all other evidence, we develop an account of intertemporal choice, the unified tradeoff model, that is simpler, yet more comprehensive, than all currently available versions of the tradeoff model taken together. It borrows extensively from its predecessors, but it introduces a new element, time bias, that enables it to accommodate an extraordinarily broad range of preference patterns, and also generate new predictions that contradict all existing models of intertemporal choice. We report four studies that test and confirm its predictions regarding delay, interval, sign, and magnitude dependence in choices between single-dated outcomes, and a fifth study that tests and confirms its predictions regarding the relation between delay preference in choices that only involve single-dated payments and duration preference in choices that also involve sequences of payments. Having subjected the unified tradeoff model to an elevated risk of disconfirmation, we discuss its parsimony and scope in relation to yet other phenomena, most notably, preference patterns in consumption decisions, the final frontier for attribute-based models. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Household Decision-Making Choices: Investment in Children's Education or Self-Consumption.

Analyzing the sustainable decision-making mechanism between household consumption and education investment can theoretically develop education. This study uses the continuous-time utility model to demonstrate the independent characteristics of consumption and education investment, as well as the principle of decision incompatibility in the decision-making process of the utility maximization problem. Then, we establish a three-phase logarithmic utility model to obtain the intertemporal decision-making path of a family. The analysis shows that the investment allocation ratio between the two phases depends on the expected and discounted level of the offsprings' abilities, while the total investment level is related to parental altruism. When parents, with foresight, factor in prospective transfer payments from progeny, the optimal decision is to maximize their children's ultimate human capital within a given total investment. Education investment not only squeezes out consumption but also promotes consumption in various periods due to future transfer payments. The decision-making process of three typical growth stages indicates that as offspring mature and their human capital increases, parents' willingness to invest in education decreases while self-consumption escalates. This study provides a new perspective and theoretical basis for studying household education expenditure, motivation, and related policy formulation.

Asymmetric crime dynamics in and out of lockdowns

Abstract This article studies the dynamic impact of a temporary policy restricting social encounters due to coronavirus disease 2019 (COVID-19) on criminal activity in Bihar, India. Using a regression discontinuity design in time and criminal case—level and arrest data, I document an immediate drop in crime of over 35% due to the lockdown. Analysis over a longer timespan shows asymmetric dynamics by crime type. The lockdown was more effective in preventing personal crimes such as murders but was less effective in preventing property crimes, which increased beyond pre-lockdown levels once the lockdown was lifted. The increase in property crimes seems to be driven by temporal crime displacement from “former offenders” and not by “new offenders.” These asymmetric dynamics across crime types provide new insights into criminals’ intertemporal decisions (JEL K14, K42).

An original approach to anomalies in intertemporal choices through functional data analysis: Theory and application for the study of Hikikomori syndrome

The pattern of intertemporal preferences is related to critical behavioural aspects involving individuals' emotional and cognitive spheres. The characteristics of the discount function can provide a quantitative interpretation of pathological conditions, such as addiction, depression, and Attention Deficit Hyperactivity Disorder (ADHD). In the literature on intertemporal preferences, researchers commonly refer to parametric models, which are often characterized by structural limitations, mainly when behavioral anomalies manifest in the dynamics of choices. This paper proposes using Functional Data Analysis (FDA) as an innovative tool to analyze discount functions' characteristics and interpret intertemporal choices' anomalies, overcoming the limits of a completely parametric approach. To show the potential of FDA in studying intertemporal decisions, this research proposes a novel methodology for dealing with discount functions and a possible application to the so-called Hikikomori condition. The latter is a social phenomenon that has recently raised concerns and claimed the need for in-depth studies. Although the application focuses on an original implementation of the functional analysis of variance approach to capture possible differences between groups of curves, the main novelty of the paper lies in the methodology for treating discount functions via FDA in the context of intertemporal choices.

Impact of self-control and time perception on intertemporal choices in gain and loss situations.

Individuals frequently encounter dilemmas in which they must choose between smaller, immediate gains and larger, delayed rewards; this phenomenon is known as intertemporal choice. The present study analyzed the interplay of trait and state self-control and time perception tendencies (time overestimation vs. time underestimation) and how it influences the rates of selecting immediate options in both gain and loss situations by conducting an intertemporal choice task. Experiment 1 was used to explore the impact of trait self-control and time perception on intertemporal choices within gain and loss situations. In Experiment 2, the e-crossing task was used to induce self-control resource depletion in participants and to investigate the impact of self-control resources and time perception on intertemporal choices in gain and loss situations. The results indicate that (1) compared with the high-self-control group, the low-self-control group exhibited a greater tendency to choose immediate options. Additionally, the high time estimation group was more likely to opt for immediate choices than the low time estimation group was. Furthermore, participants were more likely to select immediate options in the loss situation than in the gain situation. (2) In the gain situation, the high time estimation group was more likely to choose immediate options than was the low time estimation group. However, in the loss situation, the difference between the two groups was nonsignificant. (3) Time perception and gain-loss situations exerted a moderating mediating effect on the impact of self-control resources on intertemporal choices. These findings shed light on the influence of both self-control abilities and self-control resources on intertemporal choices. They provide valuable insights into intertemporal decision behaviors across diverse contexts and indicate the need for rational analysis based on one's current state to mitigate cognitive biases to ensure individuals can maximize benefits in their daily lives.