Intertemporal Decisions Research Articles

The effect of psychological distance on intertemporal choice of the reward processing: an eye-tracking investigation.

This study employed eye-tracking technology to investigate how varying dimensions of psychological distance-temporal, probability, and social-affect intertemporal choice. Across three experiments, participants were asked to select between two intertemporal options while their eye movements were monitored. Findings revealed inconsistent impacts of different psychological distances on intertemporal decision-making. Increased temporal and social distances led to a preference for larger delayed rewards (Studies 1 and 3), whereas an increase in probability distance did not significantly alter choice preferences (Study 2). The research also highlighted a general pattern in information processing; as psychological distance widened, participants showed a tendency toward dimension-specific processing in making intertemporal decisions.

The effect of future self-continuity on intertemporal decision making: a mediated moderating model.

Intertemporal decision making refers to the behavior of making decisions after weighing the costs and benefits of two or more outcomes at different time points. This study explores the moderating effect of self-concept clarity on the influence of future self-continuity on intertemporal decision-making and the mediating effect of future outcome consideration, aiming to establish a mediated moderating model. In Study 1, we recruited 370 participants via questionnaire to explore the relationship between future self-continuity and intertemporal decision-making, as well as the moderating effect of self-concept clarity. The results showed that: (1) Future self-continuity significantly negatively predicted the time discount rate of intertemporal decision-making. (2) Self-concept clarity significantly negatively moderated the relationship between future self-continuity and the time discount rate of intertemporal decision-making. In Study 2, we recruited 234 participants using an experimental method and divided them into high and low future self-continuity groups to explore the mediating effect of future outcome consideration and the moderating role of self-concept clarity in the influence of future self-continuity on intertemporal decision-making. The results indicated that: (1) Self-concept clarity significantly negatively moderated the impact of future self-continuity on future outcome consideration. (2) Future outcome consideration mediated the moderating effect of self-concept clarity on the influence of future self-continuity on intertemporal decision-making. The findings indicated that future self-continuity negatively impacted the time discount rate in intertemporal decision-making. Furthermore, self-concept clarity could indirectly regulate the effect of future self-continuity on intertemporal decision-making through future outcome consideration. These two studies contribute to a better understanding of intertemporal decision-making behavior in different states, help reduce cognitive bias through rational analysis of current states, achieve maximum life benefits, and enrich empirical research in the fields of future self-continuity and intertemporal decision-making.

The Influence of Personality on Intertemporal Decision-making

The Influence of Personality on Intertemporal Decision-making

The psychological mechanism and promotion of green behavior from the perspective of uncertainty intertemporal decision-making

The psychological mechanism and promotion of green behavior from the perspective of uncertainty intertemporal decision-making

Wyznaczanie temporalnych granic decyzji interpretacyjnej przez sąd (w świetle orzecznictwa sądów administracyjnych)

Subject of consideration in this article remains the problem of changing direction of interpretation in judicial-administrative jurisprudence, which sometimes produces consequences similar to the effects of a legislative change. Against this background, the authors attempt to formulate a description of the practice of application of law, i.e. to present jurisprudential arguments supporting decision on the scope of application of interpreted legal norm, as well as to reconstruct underlying assumptions. Using an example of two groups of selected judgments, authors consider cases in which argumentation of the temporal scope of impact of a particular interpretative direction appears in the justifications of administrative court decisions. The analysis carried out confirms that although courts generally assume the retrospective impact of interpretation, in a situation where the content of the derived legal norm fundamentally deviates from previous interpretative practice, they seek legitimization of their actions by justifying the intertemporal decision with constitutional values. These values provide an essential interpretive framework reflecting the cultural model prevalent in the native legal communication community. If courts perceive a risk of violating the values underlying the prohibition of retroactivity, such as legal certainty or principle of trust in public authorities, they indicate reasons for limiting the temporal scope of interpretation pro futuro, or on the contrary, for its effect ex tunc. Against this background, the retrospective effect of interpretation appears not as a consequence of interpretation being made, but rather as a kind of interpretative presumption that can be rebutted or confirmed if arguments are made that allow the interpretation to apply only to future states, or that give additional suport for retrospective application of new interpretation.

Scarcity makes people short-sighted? Evidence from intertemporal decision-making.

With the acceleration of the pace of society, the problem of scarcity of time resources is becoming more prominent, which may lead to short-sighted behavior. This study aimed to examine the impact of time scarcity on intertemporal choice and its underlying mechanisms through three experiments. Study 1 aimed to investigate the causal relationship between time scarcity and intertemporal choice and the mediating role of anxiety between time scarcity and intertemporal choice. The results showed that participants with a stronger perception of time scarcity were more likely to choose smaller and sooner gains, and that the mediating role of anxiety was significant. In Study 2, the control of time was introduced to explore whether the sense of control could alleviate the negative emotion caused by time scarcity. The results showed that individuals with high levels of control had significantly less anxiety under higher time-scarcity conditions than those with low levels of control. In Study 3, we manipulated time scarcity and found that the sense of control moderated the mediating effect of anxiety in time scarcity and intertemporal choice. Overall, these findings suggest that the sense of control over time is associated with less anxiety from time scarcity, which in turn fosters preferences for delayed gains.

Modulating preferences during intertemporal choices through exogenous midfrontal transcranial alternating current stimulation: A registered report

Decision conflicts may arise when the costs and benefits of choices are evaluated as a function of outcomes predicted along a temporal dimension. Electrophysiology studies suggest that during performance monitoring a typical oscillatory activity in the theta rhythm, named midfrontal theta, may index conflict processing and resolution. In the present within-subject, sham controlled, cross-over preregistered study, we delivered online midfrontal transcranial Alternating Current Stimulation (tACS) to modulate electrocortical activity during intertemporal decisions. Participants were invited to select choice preference between economic offers at three different intermixed levels of conflict (i.e., low, medium, high) while receiving either theta -, gamma-, or sham tACS in separate blocks and sessions. At the end of each stimulation block, a Letter-Flanker task was also administered to measure behavioural aftereffects. We hypothesized that theta-tACS would have acted on the performance monitoring system inducing behavioural changes (i.e., faster decisions and more impulsive choices) in high conflicting trials, rather than gamma- and sham-tACS. Results very partially confirmed our predictions. Unexpectedly, both theta- and gamma-driven neuromodulation speeded-up decisions compared to sham. However, exploratory analyses revealed that such an effect was stronger in the high-conflict decisions during theta-tACS. These findings were independent from the influence of the sensations induced by the electrical stimulation. Moreover, further analyses highlighted a significant association during theta-tACS between the selection of immediate offers in high-conflict trials and attentional impulsiveness, suggesting that individual factors may account for the tACS effects during intertemporal decisions. Finally, we did not capture long-lasting behavioural changes following tACS in the Flanker task. Our findings may inform scholars to improve experimental designs and boost the knowledge toward a more effective application of tACS.

Limited Rationality in a Cognitive Framework: Behavioral Economic Analysis Based on Consumption and Investment Phenomena

Consumption and investment are essential decision-making processes in the daily life of people, as well as key indicators of social and national economic progress and regulation. The irrational behaviors and anomalies that emerge in the market nowadays have broken through the conventional assumptions and interpretations of rational economics, therefore, clarifying the underlying logic and fundamental principles of these phenomena is of considerable reference value for the judgments people make in manufacturing and living. Drawing on the framing effect theory of behavioral economics, this study will unpack the potential impact factors rooted in behavioral decision making by incorporating the perspectives of self-framing, sentiment, intertemporal decision making and risky decision making. According to the core findings of the framing effect, the study will progressively expand to the self-framing description framework and specific emotion elicitation constructed on its basis, and then integrate the promotional framing, intertemporal decision-making perspectives to refine the comprehensive analysis of irrational behavior.

The role of chronic pain and pain anxiety in delay discounting of pain and monetary losses

Pain may alter intertemporal decisions by modifying the value of pain-related outcomes. For example, a person with chronic back pain may be faced with two choices: undergo surgery that could provide long-term relief but would involve additional short-term pain and discomfort during recovery; or continue living with the chronic pain and avoid the surgery, thus leading to overall deteriorated health. Such choices are well captured by delay discounting, which is defined as the decline in the subjective value of an outcome as the delay of its receipt increases. We investigated general pain anxiety and delay discounting of monetary losses and pain in 255 individuals with and without chronic pain. We found that people with chronic pain tend to discount the value of pain outcomes more than those without chronic pain, suggesting that chronic pain may contribute to impulsivity in decision-making related to pain. Moreover, the effect of chronic pain on delay discounting was mediated through general pain anxiety. This result, however, should be taken with caution, because the effect sizes were small, and the path model was underpowered. In conclusion, people with chronic pain might be more likely to prioritize avoiding immediate discomfort and may undervalue the potential long-term benefits of actions that could alleviate their pain in the future.

Scarcity and intertemporal choice.

Scarcity often encourages decisions that favor the present over the future. While prevailing theories largely attribute these decisions to myopic, impulsive decision making, five studies find support for an alternative, less prevalent perspective. We introduce the time horizon of threatened needs as an important determinant of scarcity's effect on intertemporal choice, demonstrating that people's decisions under scarcity reflect attempts to address threatened needs. Data from the Federal Reserve Bank of Philadelphia (Study 1) and preregistered studies (N = 10,297) show that time horizon moderates intertemporal decisions under scarcity. Study 2 manipulates scarcity perceptions among people engaged to be married, leading to increased preferences for sooner outcomes when wedding dates have shorter time horizons and a significant reversal when wedding dates have longer time horizons. Study 3 demonstrates that time horizon predicts intertemporal choice only when the intertemporal choice can help address threatened needs. Study 4 holds expense salience constant and replicates the moderation by time horizon using a paradigm that manipulates both scarcity and time horizon. Study 5 introduces multiple needs that vary in time horizon and importance, finding that decisions under scarcity reflect consideration of both the importance and temporal proximity of needs. These findings align with the perspective that people facing scarcity attempt to make decisions that are contextually appropriate. This work underscores the importance of understanding contextual variation in experiences of scarcity, suggests that decision making under scarcity is less thoughtless than presumed by the impulsive, myopic account, and offers recommendations for interventions for changing behavior under scarcity. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

News and noise in crime politics: The role of announcements and risk attitudes

We examine the process of intertemporal decision-making among potential offenders by analyzing their response to announcements of future changes in anticrime policies. We specify the utility function of potential criminals based on Epstein-Zin preferences to explicitly account for risk attitudes. In this setting, news shocks in anticrime policies can bring about immediate changes in delinquency, but heterogeneous risk attitudes among potential offenders may cause unintended outcomes in the short run. We further show that short-run effects may solidify in the event that the announced policy changes are not ultimately implemented (noise shocks). We demonstrate that rising uncertainty about policy changes may be beneficial in crime prevention, but only among risk-averse agents. Hence, this paper highlights potential pitfalls that result from neglecting the importance of risk attitudes in crime prevention – and potentially other policies.

Conventional or reverse magnitude effect for negative outcomes: A matter of framing

AbstractWe present and expand existing theories about why individuals may assess positive outcomes differently from negative outcomes in intertemporal choices. All of our theories—based on utility or cost considerations – predict a conventional magnitude effect for positive outcomes, that is, a negative relation between outcome size and subjective discount rates. For negative outcomes, however, implications are different for utility‐ and cost‐based approaches. We argue that the relevance of utility‐based aspects is strengthened in a money frame, leading to a conventional magnitude effect even for negative outcomes, whereas cost‐based considerations gain in importance in an interest rate frame, implying, in contrast, a “reverse” magnitude effect, that is, higher discount rates for (absolutely) higher outcome size. A web‐based experiment with 676 participants confirms our theoretical findings: the conventional magnitude effect prevails for positive outcomes in the money and the interest rate frame and negative outcomes in the money frame. However, there is a reverse magnitude effect for negative outcomes in the interest rate frame. Our results might help to better understand prevailing magnitude effects in practical applications and might also be apt to derive suggestions for better designing of intertemporal decision problems.

The Joint Effect of Social Comparison and Social Distance on Evaluation of Intertemporal Choice Outcomes in Event-related Potential Studies.

Intertemporal choice plays a crucial role in our daily lives, influencing decisions related to education, health, consumption, and investment. This research proposes an innovative experimental protocol that examines how social comparison and social distance jointly affect the neural processes involved in outcome assessment for intertemporal choices. The study is based on the theoretical framework of cognitive resource competition. This protocol enables researchers to dynamically establish an indifference point for each participant, effectively eliminating the influence of any biased indifference points on the assessment of intertemporal choices. Consequently, the study solely measures the combined impact of social comparison and social distance on how participants evaluate intertemporal choice outcomes. The findings reveal that individuals are more inclined to opt for immediate outcomes under negative unfair conditions. Moreover, compared to the fair and positive unfair conditions, people tend to undervalue delayed outcomes in the negative unfair condition. The strength of this approach lies in its dynamic indifference point setting, making it an effective method to investigate the influence of various external factors (such as social status and power level) on intertemporal decision-making. While the protocol is designed to measure electrophysiological events like event-related potentials, it can also be tailored for use with fMRI.

Excluded and myopic: Social exclusion increases temporal discounting.

Social exclusion is a painful yet ubiquitous experience that modulates affect, behavior, and cognition. Decision-making is an essential cognitive ability that some forms of it are altered following social exclusion. However, how intertemporal decision-making is influenced by social exclusion is scarcely studied. Here, using Future Life Alone paradigm we demonstrated that experiencing social exclusion increases temporal discounting. We further tested whether the increased temporal discounting is mediated by either time perception or risk-taking. Our results revealed that although time perception is influenced by social exclusion, neither time perception nor risk-taking mediated the changes in temporal discounting. Our results are providing further evidence corroborating that social exclusion evokes cognitive deconstruction and therefore alters temporal discounting.

MEASURING THE SOCIAL WELFARE OF A SOLAR POWER PLANT IN WEST AFRICA - A SOCIAL RETURN ON INVESTMENT (SROI) MODEL

The purpose of the paper is to present an example for the electrification of rural Africa. We will discuss the preconditions, necessities and obstacles of building a solar power plant in rural Niger. For the energy supply of a small village in West Africa a solar pilot plant (20 kWp solar plant with battery storage) is installed. This energy hub makes it possible to provide solar-powered electricity for the town, operate a (ground) water pumping system-delivering water for households and for irrigation of fields. The aim of the paper is to determine the social and individual welfare effects of the new energy system. Therefore, the social well-being of the village is analysed by the social return on investment (LSROI) model. The analysis starts with an empirical survey of the households of the village. The villagers were asked to assess the benefits of the new solar power plant investment for their household and for the whole village. Investment and household valuation are intertemporal decisions whose consequences occur at different points in time, and social actors may have different time preferences. Therefore, two different discount methods are considered. The classical standard discounting model for the technical investment and the hyperbolic discounting for the discounting of the utility of the pilot plant for the households. Four different time preference rates (0%, 1%, 5%, 10%) are used to capture different risk assumptions caused by the current global and local risks (rising energy and food prices, corona pandemic, climate change, water scarcity) and defining thereby the social time preference space. The social return on investment model determines the social return on investment for the households of the village. By rising the time preference rate from 0% to 10% a significant decline of the social benefits of the solar pilot plant can be determined. The global and local risks will rise the time preference rate of the villagers because the present becomes more and more difficult to manage and the visible future is reduced. Hence, the social revenues of the pilot plant decrease over time.

Intertemporal decision-making as a mediator between personality traits and self-management in type 2 diabetes: a cross-sectional study.

The aims to investigate the mediating effect of intertemporal decision-making on the association between personality traits and self-management among individuals with in Type 2 Diabetes (T2DM). Patients with T2DM in the early stages of hospitalization at two tertiary hospitals in Shenyang and Jinzhou, Liaoning Province, May 2022 to January 2023. Questionnaires, including General Demographic, Self-Management, Big Five Personality, and Intertemporal Decision-Making, were administered. Pearson correlation analysis examined relationships between personality traits, intertemporal decision-making, and self-management. Hierarchical regression analysis identified self-management predictors. Mediation analysis used the PROCESS SPSS Macro version 3.3 model 4 to investigate intertemporal decision-making as mediator between personality traits and self-management. Pearson correlation analysis revealed significant associations between self-management scores, personality traits, and intertemporal decision-making. Hierarchical regression revealed that Neuroticism and Conscientiousness accounted for 20.8% of the variance in self-management, while intertemporal decision-making explained 4.5% of the variance. Finally, using the Bootstrap method, the mediation analysis showed that intertemporal decision-making partially mediated the effect of personality traits on self-management. This study emphasizes the importance of intertemporal decision-making in improving self-management behaviors among patients with T2DM. Interventions targeted at modifying intertemporal decision-making preferences could be effective in enhancing self-management behaviors, leading to better health outcomes.

Precrastination and Time Perspective: Evidence from Intertemporal Decision-Making.

Although procrastination has been extensively studied, precrastination remains an unsolved puzzle. Precrastination is the tendency to start tasks as soon as possible, even at the cost of extra effort. Using the near bucket paradigm with 81 undergraduate students, this study examined the relationship between precrastination and time perspective, proactive personality, and subjects' differential performance in intertemporal decision-making. The results confirmed the cognitive-load-reduction (CLEAR) hypothesis. Precrastination was found to be positively predicted by the future time dimension of time perspective and negatively predicted by proactive personality. In addition, there is a significant positive correlation between precrastination and delay discounting of intertemporal decision-making, which exists only for the loss situation.

Temporal discounting in later life

We explore intertemporal decision-making in later life by looking at temporal preference heterogeneity among older individuals. Using choice tasks responses from Poland collected as part of the Survey of Health, Ageing, and Retirement in Europe (SHARE), we elicit individual time preferences using competing discounting specifications. With the formulation that best fits our data, we examine which individual characteristics drive the estimated heterogeneity in later life time preferences. Individual numerical abilities, labour and marital status, as well as household income turn out to be significant correlates of patience. Our analysis also provides methodological guidance for instrument design with the aim of eliciting time preferences in a general survey setting.

Optimal intertemporal liquidation of institutional investors with cash requirements and viable loans

This study examines the optimal intertemporal liquidation strategies to meet the cash requirements of large institutional investors in the presence of permanent and temporary price impacts. We construct a two-period optimal liquidation problem tailored to investors with intertemporal cash requirements, such as pension funds that need to meet periodic payment obligations. We impose viable government loans that can be deployed by state-owned investors, thereby extending the existing literature, which has focused largely on the private sector. The optimal liquidation strategies from a broader perspective can be sorted into three types: preemptive, conventional, and deferred liquidation. The use of viable large-scale loans can be attractive as a buffer in intertemporal decisions. Proper consideration of the timing and amount for liquidation of institutional investors is necessary. This study has important implications for policy makers and can inform the design of strategies for managing the liquidity needs of large institutional investors.

A Markov Decision Process with Awareness and Present Bias in Decision-Making

We propose a Markov Decision Process Model that blends ideas from Psychological research and Economics to study decision-making in individuals with self-control problems. We have borrowed a dual-process of decision-making with self-awareness from Psychological research, and we introduce present bias in inter-temporal preferences, a phenomenon widely explored in Economics. We allow for both an exogenous and endogenous, state-dependent, present bias in inter-temporal decision-making and explore, by means of numerical simulations, the consequences on well-being emerging from the solution of the model. We show that, over time, self-awareness may mitigate present bias and suboptimal choice behaviour.