When Are We Willing to Wait? Prescriptive Challenges in Evaluating Intertemporal Outcomes

Jeffery L. Guyse (), Candice H. Huynh (), L. Robin Keller () and Jay Simon ()
Additional contact information
Jeffery L. Guyse: Technology and Operations Management, College of Business Administration, California State Polytechnic University
Candice H. Huynh: Technology and Operations Management, College of Business Administration, California State Polytechnic University
L. Robin Keller: The Paul Merage School of Business, University of California
Jay Simon: Kogod School of Business, American University

A chapter in Behavioral Decision Analysis, 2024, pp 187-211 from Springer

Abstract: Abstract The classic normative model for intertemporal preferences uses a constant discount rate, but behavioral experiments have shown that people do not tend to make choices consistent with a constant discount rate. We first present normative models for time preferences, then discuss descriptive results for choices between single outcomes occurring at different times. People often have different implicit discount rates for different types of scenarios, and several anomalies arise consistently. We contrast those results with findings for preferences for sequences of multiple outcomes over time. People tend to prefer increasing or constant sequences of outcomes over time, especially when the outcomes are non-monetary in nature. This suggests a willingness to wait for improvement, but not in the way that classical discounting would prescribe. We end with prescriptive nudges to improve dynamic consistency and pose questions still to be resolved about how decisions involving outcomes over time can be improved prescriptively.

Keywords: Intertemporal preferences; Normative model; Descriptive models; Prescriptive interventions (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:isochp:978-3-031-44424-1_10

Ordering information: This item can be ordered from
http://www.springer.com/9783031444241

DOI: 10.1007/978-3-031-44424-1_10

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().