Time matters less when outcomes differ: unimodal vs. cross-modal comparisons in intertemporal choice

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

External organisations

  • School of Economics and Centre for Decision Research and Experimental Economics, University of Nottingham, Nottingham NG7 2RD, United Kingdom
  • Warwick University

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.

Details

Original languageEnglish
Pages (from-to)873-887
JournalManagement Science
Volume64
Issue number2
Early online date16 Feb 2017
Publication statusPublished - Feb 2018