Four Score and Seven Years from Now: The Date/Delay Effect in Temporal Discounting

Daniel Read (), Shane Frederick (), Burcu Orsel () and Juwaria Rahman ()
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Daniel Read: Durham Business School, University of Durham, Mill Hill Lane, Durham City, United Kingdom DH1 3LB
Shane Frederick: Sloan School of Management, Massachusetts Institute of Technology, 38 Memorial Drive, Building 56-317, Cambridge, Massachusetts 02142
Burcu Orsel: Goldman Sachs International, Peterborough Court, 133 Fleet Street, London, United Kingdom EC4A 2BB
Juwaria Rahman: Office for National Statistics, 1 Drummond Gate, Room D2/081, London, United Kingdom SW1V 2QQ

Management Science, 2005, vol. 51, issue 9, 1326-1335

Abstract: We describe a new anomaly in intertemporal choice---the "date/delay effect": discount rates that are imputed when time is described using calendar dates (e.g., on October 17) are markedly lower than those revealed when future outcomes are described in terms of the corresponding delay (e.g., in six months). Date descriptions not only reduce discount rates, but also affect the implied shape of the discount function: When inferred from intertemporal choices between options referenced by calendar dates, the discount function appears markedly less hyperbolic. We discuss potential psychological bases of the date/delay effect, its implications, and other modes of temporal reference.

Keywords: intertemporal choice; framing effects; decision making (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:51:y:2005:i:9:p:1326-1335

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