Discount models in intertemporal choice: an empirical analysis

Brain activations reflect individual discount rates in intertemporal choice.

Humans discount the value of future rewards following a hyperbolic function and thus may prefer a smaller immediate reward over a larger delayed reward. Marked interindividual differences in the steepness of this discounting function can be observed which can be quantified by the parameter k of the discount function. Here, we asked how differences in delay discounting behaviour are reflected by...

Descriptive Models of Intertemporal Choice 1 Running Head: DESCRIPTIVE MODELS OF INTERTEMPORAL CHOICE Descriptive Models of Intertemporal Choice Part 1: Accuracy and Applicability

Two comparative models of intertemporal choice have recently been proposed as an alternative to the standard hyperbolic discounting model. One, the interval discounting model, retains the notion that intertemporal choice is governed by discounting, but proposes that discounting involves direct comparisons between the options along the time attribute. The other, the tradeoff model, discards the ...

DRIFT: an analysis of outcome framing in intertemporal choice.

People prefer to receive good outcomes immediately rather than wait, and they must be compensated for waiting. But what influences their decision about how much compensation is required for a given wait? To give a partial answer to this question, we develop the DRIFT model, a heuristic description of how framing influences intertemporal choice. We describe 4 experiments showing the implications...

Intertemporal Choice

Intangibility in intertemporal choice.

Since the advent of the discounted utility (DU) model, economists have thought about intertemporal choice in very specific terms. DU assumes that people make explicit trade-offs between costs and benefits occurring at different points in time. While this explicit trade-off perspective is simple and tractable, and has stimulated productive research, it does not provide a very realistic represent...