Debiasing or rebiasing? Moderating the illusion of delayed incentives

Dilip Soman and Maggie Wenjing Liu

Journal of Economic Psychology, 2011, vol. 32, issue 3, 307-316

Abstract: This paper studies corrective strategies for the illusion of delayed incentives (Soman, 1998), the phenomena that money-for-effort transactions that are unattractive in the present appear attractive when they are in the future. This illusion occurs because future effort is discounted more heavily than future monetary outcomes. In this research, we show that this bias of differential discounting can be corrected by asking consumers to perform effort at the time of decision-making. We further outline three explanations for why this intervention attenuates the illusion of delayed incentives, and discuss whether these explanations constitute a debiasing effect or a rebiasing effect (Larrick, 2004). We report the results of two laboratory experiments and discuss theoretical and practical implications of our findings.

Keywords: Intertemporal; choice; Hyperbolic; discounting; Delayed; incentives; Debiasing; Rebiasing (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:32:y:2011:i:3:p:307-316

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