Consumers often make decisions about outcomes and events that occur over time. This research examines consumers' sensitivity to the prospective duration relevant to their decisions and the implications of such sensitivity for intertemporal trade-offs, especially the degree of present bias (i.e., hyperbolic discounting). The authors show that participants' subjective perceptions of prospective duration are not sufficiently sensitive to changes in objective duration and are nonlinear and concave in objective time, consistent with psychophysical principles. More important, this lack of sensitivity can explain hyperbolic discounting. The results replicate standard hyperbolic discounting effects with respect to objective time but show a relatively constant rate of discounting with respect to subjective time perceptions. The results are replicated between subjects (Experiment 1) and within subjects (Experiments 2), with multiple time horizons and multiple descriptors, and with different measurement orders. Furthermore, the authors show that when duration is primed, subjective time perception is altered (Experiment 4) and hyperbolic discounting is reduced (Experiment 3).
AinslieGeorge (1975), “Specious Reward: A Behavioral Theory of Impulsiveness and Impulse Control,”Psychological Bulletin, 82(4), 463–69.
2.
AinslieGeorge, and HaslamNick (1992), “Hyperbolic Discounting,” in Choice Over Time, LoewensteinG., and ElsterJ., eds. New York: Russell Sage Foundation, 57–92.
3.
ArielyDan, and LoewensteinGeorge (2000), “When Does Duration Matter in Judgment and Decision Making,”Journal of Experimental Psychology: General, 129(December), 508–523.
4.
BlockRichard A., and ZakayDan (1997), “Prospective and Retrospective Duration Judgments: A Meta-Analytic Review,”Psychonomic Bulletin and Review, 4(June), 184–97.
5.
BlockRichard A., and ZakayDan (2001), “Retrospective and Prospective Timing: Memory, Attention, and Consciousness,” in Time and Memory: Issues in Philosophy and Psychology, HoerlChristoph, and McCormackTeresa, eds. Oxford: Oxford University Press, 59–76.
6.
CarstensenLaura L., IsaacowitzDerek M., and CharlesSusan T. (1999), “Taking Time Seriously: A Theory of Socioemotional Selectivity,”American Psychologist, 54(3), 165–81.
7.
DehaeneStanislas (2003), “The Neural Basis of the Weber-Fechner Law: A Logarithmic Mental Number Line,”Trends in Cognitive Sciences, 7(April), 145–47.
8.
EbertJane, and PrelecDrazen (2007), “The Fragility of Time: Time-Insensitivity and Valuation of the Near and Far Future,”Management Science, 53(September), 1423–38.
9.
FraissePaul (1984), “Perception and Estimation of Time,”Annual Review of Psychology, 35, 1–36.
10.
FredricksonBarbara L., and KahnemanDaniel (1993), “Duration Neglect in Retrospective Evaluations of Affective Episodes,”Journal of Personality and Social Psychology, 65(July), 44–55.
11.
GescheiderGeorge, A. (1985), Psychophysics: Method, Theory, and Application.Hillsdale, NJ: Lawrence Erlbaum Associates.
12.
GibbonJohn (1977), “Scalar Expectancy Theory and Weber's Law in Animal Timing,”Psychological Review, 84(March), 279–325.
13.
GrondinSimon (2001), “From Physical Time to the First and Second Moments of Psychological Time,”Psychological Bulletin, 127(1), 22–44.
14.
HigginsTory E., BarghJohn A., and LombardiWendy J. (1985), “Nature of Priming Effects on Categorization,”Journal of Experimental Psychology: Learning, Memory, and Cognition, 11(1), 59–69.
15.
HseeChristopher, K. (2000), “Attribute Evaluability and Its Implications for Joint-Separate Evaluation Reversals and Beyond,” in Choices, Values and Frames, KahnemanDaniel, and TverskyAmos, eds. Cambridge, UK: Cambridge University Press, 543–63.
16.
KirbyKris, N. (1997), “Bidding on the Future: Evidence Against Normative Discounting of Delayed Rewards,”Journal of Experimental Psychology: General, 126(1), 54–70.
17.
LaibsonDavid (1997), “Golden Eggs and Hyperbolic Discounting,”Quarterly Journal of Economics, 112(May), 443–78.
18.
LeBoeufRobyn, A. (2006), “Discount Rates for Time Versus Dates: The Sensitivity of Discounting to Time-Interval Description,”Journal of Marketing Research, 43(February), 59–72.
19.
LoewensteinGeorge, F. (1996), “Out of Control: Visceral Influences on Behavior,”Organizational Behavior and Human Decision Processes, 65(February), 272–92.
20.
LoewensteinGeorge F., and PrelecDrazen (1992), “Anomalies in Intertemporal Choice: Evidence and an Interpretation,”Quarterly Journal of Economics, 107(2), 573–97.
21.
MalkocSelin A., and ZaubermanGal (2006), “Deferring Versus Expediting Consumption: The Effect of Outcome Concreteness on Sensitivity to Time Horizon,”Journal of Marketing Research, 43(November), 618–27.
22.
MazurJames, E. (1984), “Tests of an Equivalence Rule for Fixed and Variable Delays,”Journal of Experimental Psychology: Animal Behavior Processes, 10(October), 426–36.
23.
MetcalfeJanet, and MischelWalter (1999), “A Hot/Cool-System Analysis of Delay of Gratification: Dynamics of Willpower,”Psychological Review, 106(1), 3–19.
24.
O'DonoghueTed, and RabinMatthew (1999), “Doing It Now or Later,”American Economic Review, 89(March), 103–124.
25.
PigouArthur, C. (1920), The Economics of Welfare.London: Macmillan.
26.
RafteryAdrian, E. (1995), “Bayesian Model Selection in Social Research,”Sociological Methodology, 25, 111–63.
27.
ReadDaniel (2001), “Is Time-Discounting Hyperbolic or Subadditive?”Journal of Risk and Uncertainty, 23(1), 5–32.
28.
ReadDaniel, FrederickShane, OrselBurcu, and RahmanJuwaria (2005), “Four Score and Seven Years from Now: The Date/Delay Effect in Temporal Discounting,”Management Science, 51(September), 1326–35.
29.
ReadDaniel, and LoewensteinGeorge (1995), “The Diversification Bias: Explaining the Difference Between Prospective and Real-Time Taste for Variety,”Journal of Experimental Psychology: Applied, 1(1), 34–49.
30.
ReadDaniel, and PeterH.M. P Roelofsma, (2003), “Subadditive Versus Hyperbolic Discounting: A Comparison of Choice and Matching,”Organization Behavior and Human Decision Making Processes, 91(July), 140–53.
31.
RubinsteinAriel (2003), “Economics and Psychology? The Case of Hyperbolic Discounting,”International Economic Review, 44(4), 1207–1216.
32.
ScholtenMarc, and ReadDaniel (2006), “Discounting by Intervals: A Generalized Model of Intertemporal Choice,”Management Science, 52(9), 1426–38.
33.
SchwarzNorbert, and CloreGerald L. (2006), “Feelings and Phenomenal Experiences,” in Social Psychology: A Handbook of Principles, 2d ed., Tory HigginsE., and KruglanskiArie, eds. New York: Guilford Press, 1–74.
34.
SheroverCharles, M. (1975), The Human Experience of Time: The Development of Its Philosophic Meaning.New York: New York University Press.
35.
StevensStanley, S. (1957), “On the Psychophysical Law,”Psychological Review, 64(3), 153–81.
36.
StrotzRobert H. (1955), “Myopia and Inconsistency in Dynamic Utility Maximization,”Review of Economic Studies, 23(3), 165–80.
37.
TakahashiTaiki (2005), “Loss of Self-Control in Intertemporal Choice May Be Attributable to Logarithmic Time Perception,”Medical Hypotheses, 65(4), 691–93.
38.
TakahashiTaiki (2006), “Time-Estimation Error Following Weber-Fechner Law May Explain Subadditive Discounting,”Medical Hypotheses, 67(6), 1372–74.
39.
ThalerRichard, H. (1981), “Some Empirical Evidence on Dynamic Inconsistency,”Economic Letters, 8(3), 201–207.
40.
TropeYaacov, and LibermanNira (2003), “Temporal Construal,”Psychological Review, 110(3), 403–421.
41.
TuretzkyPhilip (1998), Time.London: Routledge.
42.
TverskyAmos, and KoehlerDerek J. (1994), “Support Theory: A Nonextensional Representation of Probability,”Psychological Review, 101(4), 547–67.
43.
WittmannMarc, and PaulusMartin P. (2007), “Decision Making, Impulsivity and Time Perception,”Trends in Cognitive Sciences, 12(1), 7–12.
44.
ZaubermanGal (2003), “The Intertemporal Dynamics of Consumer Lock-In,”Journal of Consumer Research, 30(December), 405–419.
45.
ZaubermanGal, and LynchJohn G. (2005), “Resource Slack and Propensity to Discount Delayed Investments of Time Versus Money,”Journal of Experiment Psychology: General, 134(1), 23–37.
46.
ZimbardoPhilip G., and BoydJohn N. (1999), “Putting Time in Perspective: A Valid, Reliable Individual-Differences Metric,”Journal of Personality and Social Psychology, 77 (December), 1271–88.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
