Introducing upfront losses as well as gains decreases impatience in intertemporal choices with rewards

Cheng-Ming Jiang, Feng-Pei Hu and Long-Fei Zhu

Judgment and Decision Making, 2014, vol. 9, issue 4, 297-302

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.

Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:judgdm:v:9:y:2014:i:4:p:297-302_1

Access Statistics for this article

More articles in Judgment and Decision Making from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().