Time Matters Less When Outcomes Differ: Unimodal vs. Cross-Modal Comparisons in Intertemporal Choice

Robin Cubitt, Rebecca McDonald () and Daniel Read ()
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Rebecca McDonald: Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom
Daniel Read: Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom

Management Science, 2018, vol. 64, issue 2, 873-887

Abstract: Unimodal intertemporal decisions involve comparing options of the same type (e.g., apples now versus apples later), and cross-modal decisions involve comparing options of different types (e.g., a car now versus a vacation later). As we show, existing models of intertemporal choice do not allow time preference to depend on whether the comparisons to be made are unimodal or cross-modal. We test this restriction in an experiment using the delayed compensation method , a new extension of the standard method of eliciting intertemporal preferences that allows for assessment of time preference for nonmonetary and discrete outcomes, as well as for both cross-modal and unimodal comparisons. Participants were much more averse to delay for unimodal than cross-modal decisions. We provide two potential explanations for this effect: one drawing on multiattribute choice, the other drawing on construal-level theory.

Keywords: intertemporal choice; decision modelling; economics: behavior and behavioral decision making; delay discounting (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:64:y:2018:i:2:p:-873-887

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