Assessing a 2-System Model of Quasi-Hyperbolic Temporal Discounting

People make intertemporal choices, decisions regarding costs and benefits at different points in time, as a matter of routine. Such choices range from mundane decisions, like when to set one’s alarm clock, to critical decisions, like whether or not to invest in retirement plans or health insurance. Beyond individuals’ decisions, nations must also make intertemporal choices when charting courses of action that will affect both the present population and future generations. The centrality of such choices in determining behavior begs the question: What principles guide peoples intertemporal choices? This question is of deep interest and importance in a number of fields, including economics and cognitive psychology. As a rule, people tend to value immediate outcomes more than future ones and we may begin to fashion an answer beyond that by describing axiomatically the process of temporal discounting.