Time Matters Less When Outcomes Differ: Unimodal vs. Cross-Modal Comparisons in Intertemporal Choice
Robin Cubitt, Rebecca McDonald, Daniel Read
Management Science · 2018 · Volume 64 · Issue 2
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. Data are available at https://doi.org/10.1287/mnsc.2016.2613 . This paper was accepted by Yuval Rottenstreich, judgment and decision making.
Keywords
intertemporal choice, decision modelling, economics, behavior and behavioral decision making, delay discounting
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