Choice Bracketing and Construal Level Theory: The Effects of Problem Representation and Mental Representation on Sequential Risk-Taking

Two important theories in intertemporal choice are choice bracketing and construal level theory (CLT), but their relationship to each other is unexplored. Broad bracketing (considering many choices in a sequence) may induce a more holistic approach to decisions, suggesting overlap between choice bracketing and CLT. We attempt to integrate the theories and distinguish their effects on risk-taking. In three studies we demonstrate that construal level (manipulated through temporal distance) and choice bracketing have independent effects on risk-taking. Greater temporal distance and broader choice brackets both significantly increase risk-taking, even controlling for both manipulations simultaneously. We also test and find that temporal distance acts through mental construal, and its effect on risk-taking is mediated by risk perception, while bracketing acts through another mechanism. Taken together, our results indicate that choice bracketing, a well-accepted result in the decision-making literature, is independent from construal level theory. This finding has important implications for financial decision-making and other consumer-related choices that take place over time or wherein consumers must make decisions for the future.