Immediacy and Certainty in Intertemporal Choice

Abstract

Time delay and uncertainty are deeply interrelated though the nature of the interaction between these two constructs remains equivocal. The immediacy and the certainty effects provide an easy access to study the relationship between time delay and uncertainty. Three experiments are described which examine the effect of uncertainty on the immediacy effect and the effect of time delay on the certainty effect. We also present analytical arguments that lead to the tentative conclusion that immediacy is more likely to be a derivative of certainty than the reverse. It is further proposed that laboratory experiments may undermine the importance of uncertainty underlying time delays as demonstrated in experiment 4. Theoretical and methodological intricacies associated with separating uncertainty and time delay are discussed.