Introducing upfront losses as well as gains decreases impatience in intertemporal choices with rewards
Journal Title: Judgment and Decision Making - Year 2014, Vol 9, Issue 4
Abstract
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.
Authors and Affiliations
Cheng-Ming Jiang, Feng-Pei Hu and Long-Fei Zhu
Keywords
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