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This paper proposes a novel account of impatience: People pay more attention to the opportunity costs of choosing larger, later rewards than to the opportunity costs of choosing smaller, sooner ones. Eight studies show that when the opportunity costs of choosing smaller, sooner rewards are subtly highlighted, people become more patient, whereas when the opportunity costs of choosing larger, later rewards are highlighted this has no effect. This pattern is robust to variations in the choice task, to the participant population, and to whether the choices are incentivized or hypothetical. We argue that people are naturally aware of the opportunity costs of delayed rewards but pay less attention to those associated with smaller, sooner ones. We conclude by discussing implications for theory and policy. Data, as supplemental material, are available at https://doi.org/10.1287/mnsc.2016.2547 . This paper was accepted by Yuval Rottenstreich, judgment and decision making.

We experimentally show that during decisions between smaller-sooner and larger-later monetary rewards, devaluing future rewards meets and serves evolutionary principles of long-term reward rate maximization in human participants. The present data thus reconcile the economically flavored theory implying that choices are based on the incremental devaluation of reward as the time of its receipt passes, and the account rooted in behavioral ecology that predicts that choices should maximize reward rate in the long run.

Introduction Subjective cognitive decline (SCD) refers to an at-risk state of Alzheimer's disease and subtle cognitive deficits that have been observed in this condition. Currently, it is unknown whether complex cognitive processes relevant to everyday life, such as future-oriented choice behavior, are also altered in SCD. Methods Twenty SCD participants and 24 control (CO) participants took part in a functional magnetic resonance imaging task on intertemporal decisions, with and without simultaneous episodic future imagination. Results SCD participants showed reduced future-oriented choices. Future imagination increased future-oriented choices and was associated with increased brain activation in medial frontal polar cortex, right insular cortex, and anterior cingulate cortex in CO only, not SCD. In addition, more future-oriented choices were associated with hippocampal activation during choice processing in CO only. Discussion Subtle neuronal network disruptions in SCD may underlie their myopic future decisions and lack of modulation of choice behavior by episodic future imagination.

Across species, aging is associated with an increased ability to choose delayed over immediate gratification. These experiments used young and aged rats to test the role of the basolateral amygdala (BLA) in intertemporal decision making. An optogenetic approach was used to inactivate the BLA in young and aged rats at discrete time points during choices between levers that yielded a small, immediate vs. a large, delayed food reward. BLA inactivation just prior to decisions attenuated impulsive choice in both young and aged rats. In contrast, inactivation during receipt of the small, immediate reward increased impulsive choice in young rats but had no effect in aged rats. BLA inactivation during the delay or intertrial interval had no effect at either age. These data demonstrate that the BLA plays multiple, temporally distinct roles during intertemporal choice, and show that the contribution of BLA to choice behavior changes across the lifespan., eLife digest One marshmallow now or two in 15 minutes? That was the choice offered to young children in a classic psychology experiment known as the Stanford marshmallow test. Children who chose to wait went on to do better at school and to show healthier body weights in later life than those who ate the single marshmallow. A brain region called the basolateral amygdala (BLA) helps individuals choose between rewards that differ both in size and in when they will be available. Studies in people and in rodents show that the ability to wait for a larger reward – to delay gratification – increases with age. But whether changes in BLA activity contribute to this change was not known. Choosing between a small reward now versus a larger one later involves several steps. Before a choice, individuals use their previous experience to compare the value of the immediate and the delayed rewards. How they feel at the time can bias this judgment. Someone who is hungry, for example, will assign greater value to receiving a single marshmallow now than someone who feels full. After making their choice, the individual then decides whether the reward they received was better or worse than they expected. This information helps them adjust their expectations for next time. Hernandez et al. set out to examine how the BLA contributes to these different parts of the decision. Young and old rats were given a choice between a small food reward now or a larger reward after a delay. Hernandez et al. used optogenetic tools to temporarily inactivate the BLA either before or after the rats made their choice, and found that the role of the BLA varies across the lifespan. Inactivating the BLA before the choice made both young and old rats more likely to wait for the larger reward. By contrast, inactivating the BLA after a choice made young rats less likely to wait next time round, but had no effect in the older rats. Changes in BLA activity with aging may thus make it easier to delay gratification in later life. But while the willingness of older adults to forego short-term rewards for long-term gain is often viewed as ‘wisdom’, such behavior can also be problematic. A pensioner who decides not to spend some of their savings on heating, for example, may be needlessly reducing their quality of life. Moreover, extreme impulsivity and extreme patience both feature in psychiatric disorders. The former may drive addiction, while the latter is a hallmark of anorexia. Identifying the mechanisms that underlie the ability to delay gratification may therefore help to promote effective decision-making in aging and psychiatric disorders.

Dual process theories of intertemporal decision making propose that decision makers automatically favor immediate rewards. In this paper, we use a drift diffusion model to implement these theories, and empirically investigate the role of their proposed automatic biases. Our model permits automatic biases in the response process, in the form of a shifted starting point, as well as automatic biases in the evaluation process, in the form of an additive drift rate intercept. We fit our model to individual-level choice and response time data, and find that automatic biases (as measured though the starting point and drift rate intercept in our model) are prevalent in intertemporal choice, but that the type, magnitude, and direction of these biases vary greatly across individuals. Our results pose new challenges for theories of intertemporal choice behavior.

Aging is associated with an increased ability to delay gratification. Moreover, even when matched for performance, young and aged subjects recruit distinct brain circuitry to complete complex cognitive tasks. Experiments herein used an optogenetic approach to test whether altered recruitment of the basolateral amygdala (BLA), a brain region implicated in valuation of reward-cost contingencies, contributes to age-dependent changes in intertemporal decision making. BLA inactivation while rats deliberated prior to choices between options that yielded either small, immediate or large, delayed rewards rendered both young and aged rats less impulsive. In contrast, BLA inactivation after choices were made (during evaluation of choice outcomes) rendered young rats more impulsive but had no effect in aged rats. These data define multiple, temporally-discrete roles for BLA circuits in intertemporal decision making and implicate altered recruitment of BLA in the elevated preference for delayed rewards that is characteristic of advanced age.Impact StatementBasolateral amygdala (BLA) performs multiple, temporally-discrete functions during intertemporal decision making. Differential engagement of BLA contributes to the enhanced ability to delay gratification that is characteristic of advanced ages.

Mouse-tracking is an increasingly popular process-tracing method. It builds on the assumption that the continuity of cognitive processing leaks into the continuity of mouse movements. Because this assumption is the prerequisite for meaningful reverse inference, it is an important question whether the assumed interaction between continuous processing and movement might be influenced by the methodological setup of the measurement. Here we studied the impacts of three commonly occurring methodological variations on the quality of mouse-tracking measures, and hence, on the reported cognitive effects. We used a mouse-tracking version of a classical intertemporal choice task that had previously been used to examine the dynamics of temporal discounting and the date-delay effect (Dshemuchadse, Scherbaum, & Goschke, 2013). The data from this previous study also served as a benchmark condition in our experimental design. Between studies, we varied the starting procedure. Within the new study, we varied the response procedure and the stimulus position. The starting procedure had the strongest influence on common mouse-tracking measures, and therefore on the cognitive effects. The effects of the response procedure and the stimulus position were weaker and less pronounced. The results suggest that the methodological setup crucially influences the interaction between continuous processing and mouse movement. We conclude that the methodological setup is of high importance for the validity of mouse-tracking as a process-tracing method. Finally, we discuss the need for standardized mouse-tracking setups, for which we provide recommendations, and present two promising lines of research toward obtaining an evidence-based gold standard of mouse-tracking.

Intertemporal decision-making refers to the process whereby an individual evaluates and selects among competing alternatives based on the cost and benefit over time. While most previous studies on temporal discounting focused their attention on the gain context, only a few explored the loss context. In the present study, both the event-related potentials (ERPs) and the graph theory analysis were employed to investigate the differences in intertemporal decision-making between the gain and loss frameworks. Our results suggested that participants preferred the short latency/small amount (SS) alternatives and exhibited a smaller discount rate in a loss context compared to a gain framework. Furthermore, our ERP data indicated that the P200 component could constitute a preliminary assessment of the decision-making, related to gain and loss. In contrast, the N2 component was associated with negative emotions and showed significantly bigger amplitudes in the loss context, when compared to the gain framework. Further analyses of brain networks suggested the loss decision-making brain network to have a larger small-worldness index given individuals' loss aversion. Taken together, intertemploral decision-making in a loss context was accompanied by a greater brain response due to the negative emotions linked to loss aversion.

Contains fulltext : 157169.pdf (Publisher’s version ) (Open Access) Choosing between smaller prompt rewards and larger later rewards is a common choice problem, and studies widely agree that frontostriatal circuits heavily innervated by dopamine are centrally involved. Understanding how dopamine modulates intertemporal choice has important implications for neurobiological models and for understanding the mechanisms underlying maladaptive decision-making. However, the specific role of dopamine in intertemporal decisions is not well understood. Dopamine may play a role in multiple aspects of intertemporal choicesthe valuation of choice outcomes and sensitivity to reward delays. To assess the role of dopamine in intertemporal decisions, we tested Parkinson disease patients who suffer from dopamine depletion in the striatum, in either high (on medication, PDON) or low (off medication, PDOFF) dopaminergic states. Compared with both PDOFF and healthy controls, PDON made more farsighted choices and reduced their valuations less as a function of increasing time to reward. Furthermore, reduced discounting in the high dopaminergic state was robust across multiple measures, providing new evidence for dopamine's role in making decisions about the future. 11 p.

Delay discounting is usually studied at the individual level, though there exist many situations where dyads and small groups have to make intertemporal decisions about delayed rewards. In the current study, we investigated the social dynamics in collective intertemporal decision making by experimentally manipulating group leadership and status differentials among dyad and group members. Participants in all experiments completed three phases of an intertemporal decision-making task: an individual pre-collaboration phase, a collaboration phase in dyads or small groups, and an individual post-collaboration phase. In Experiments 1 and 2, small groups of three made collective decisions during the collaboration phase, with one member of the group being assigned a leadership position. Groups believed that leaders were chosen either randomly (Experiment 1) or systematically based on the normativity of the leader's pre-collaboration decisions (Experiment 2). Leaders exerted a stronger influence on group preferences than non-leaders, but only when participants believed leaders were chosen systematically. Experiment 3 then demonstrated that lower-status dyad members were more affected by a collaborative experience compared to higher-status members, suggesting that social influence on delay discounting depends on the relative status between dyad and group members.

A large number of studies have demonstrated that intertemporal decision making process usually results in preferences that reverse over time, or choices that are inconsistent over time. Inconsistency can be explained by different discount models by the effect of reward value perception at different moments. Otherwise, one can also understand inconsistency as the result of the time perception effect. Here, we address inconsistency as the result of a subjective time dilation perception effect. We use arguments inspired by the special theory of relativity and focused our study on a generalized model that encompasses psychophysical effects on time perception, where we look for a transformation of the time interval between the pay times of two rewards. Additionally, we present a generalized two-argument hyperbolic utility function for the Bernoulli (logarithmic) one, associating their difference to subjective time intervals.

Most applications of real options analysis assume a single decision-maker uses flexibility to maximize a firm's market value. This paper presents an alternative approach suitable for firms with two utility-maximizing decision-makers who have joint responsibility for setting firm policies. In this approach the Nash bargaining solution is used to determine the outcome at each date in a way that ensures policies are dynamically consistent. It is illustrated using resource-extraction and liquidity-management problems.

Item does not contain fulltext Intertemporal decision-making involves simultaneous evaluation of both the magnitude and delay to reward, which may require the integrated representation and comparison of these dimensions within working memory (WM). In the current study, neural activation associated with intertemporal decision-making was directly compared with WM load-related activation. During functional magnetic resonance imaging, participants performed an intermixed series of WM trials and intertemporal decision-making trials both varying in load, with the latter in terms of choice difficulty, via options tailored to each participant's subjective value function for delayed rewards. The right anterior prefrontal cortex (aPFC) and dorsolateral prefrontal cortex (dlPFC) showed activity modulation by choice difficulty within WM-related brain regions. In aPFC, these 2 effects (WM, choice difficulty) correlated across individuals. In dlPFC, activation increased with choice difficulty primarily in patient (self-controlled) individuals, and moreover was strongest when the delayed reward was chosen on the most difficult trials. Finally, the choice-difficulty effects in dlPFC and aPFC were correlated across individuals, suggesting a functional relationship between the 2 regions. Together, these results suggest a more precise account of the relationship between WM and intertemporal decision-making that is specifically tied to choice difficulty, and involves the coordinated activation of a lateral PFC circuit supporting successful self-control. 12 p.

Intertemporal choices are common and consequential to private and public life. Thus, there is considerable interest in understanding the neural basis of intertemporal decision making. In this minireview, we briefly describe conceptual and psychological perspectives on intertemporal choice and then provide a comprehensive evaluation of the neural structures and signals that comprise the underlying cortico-limbic-striatal circuit. Even though great advances have been made, our understanding of the neurobiology of intertemporal choice is still in its infancy because of the complex and dynamic nature of this form of decision making. We close by briefly discussing recommendations for the future study of intertemporal choice research.

Intertemporal decision-making refers to choices among options that vary in both magnitude and delay to arrival (e.g., choices between a small, immediate reward vs a large, delayed reward). An individual’s preference for immediate over delayed rewards depends in part on the degree to which delays reduce (discount) the rewards’ subjective value, and is considered to be one dimension of impulsivity (“impulsive choice”). A large body of literature has demonstrated elevated levels of impulsive choice in chronic cocaine users. This chapter begins by reviewing this literature in terms of the direction of causality in the relationship between cocaine use and impulsive choice (whether high levels of impulsive choice are a predisposing factor for or a consequence of cocaine use). The chapter goes on to discuss research in animal models that has begun to address these causal relationships, as well as neural mechanisms that may underlie these relationships.

When faced with an intertemporal choice between a smaller short-term reward and a larger long-term prize, is opting for the latter always indicative of delay tolerance? And is delay tolerance always to be regarded as a manifestation of self-control, and thus as a rational solution to intertemporal dilemmas? I argue in favor of a negative answer to both questions, based on evidence collected in the delay discounting literature. This highlights the need for a nuanced understanding of rationality in intertemporal choice, to capture also situations in which waiting is not the optimal strategy. This paper suggests that such an understanding is fostered by adopting social choice theory as a promising framework to model intertemporal decision making. Some preliminary results of this approach are discussed, and its potential is compared with a much more studied formal model for intertemporal choice, i.e. game theory. (C) 2016 Elsevier B.V. All rights reserved.

During intertemporal choice, humans tend to prefer small-sooner rewards over larger-delayed rewards, reflecting temporal discounting (TD) of delayed outcomes. Functional neuroimaging (fMRI) evidence has implicated the insular cortex in time-sensitive decisions, yet it is not clear whether activity in this brain region is crucial for, or merely associated with, TD behavior. Here, patients with damage to the insula (Insular patients), control patients with lesions outside the insula, and healthy individuals chose between smaller-sooner and larger-later monetary rewards. Insular patients were less sensitive to sooner rewards than were the control groups, exhibiting reduced TD. A Voxel-based Lesion-Symptom Mapping (VLSM) analysis confirmed a statistically significant association between insular damage and reduced TD. These results indicate that the insular cortex is crucial for intertemporal choice. We suggest that he insula may be necessary to anticipate the bodily/emotional effects of receiving rewards at different delays, influencing the computation of their incentive value. Devoid of such input, insular patients’ choices would be governed by a heuristic of quantity, allowing patients to wait for larger options.

We propose and test a new method for eliciting curvature-controlled discount rates that are invariant to the form of the utility function. Our method uses a single elicitation task and obtains individual discount rates without knowledge of risk attitude or parametric assumptions about the form of the utility function. We compare our method to a double elicitation technique in which the utility function and discount rate are jointly estimated. Our experiment shows that these methods yield consistent estimates of the discount rate, which is reassuring given the wide range of estimates in the literature. We find little evidence of probability weighting, but in a second experiment, we observe that discount rates are sensitive to the length of the front-end delay, suggesting present bias. When the front-end delay is at least two weeks, we estimate average discount rates to be 11.3 and 12.2% in the two experiments.

Introduction: Given the lack of consensus regarding changes in temporal and probability discounting as a function of smoking abstinence in cigarette smokers, the present study comprehensively examined possible changes in these processes following a period of acute smoking abstinence consistent with elevated withdrawal symptoms and craving. Methods: Computerized temporal and probability discounting assessments were collected from cigarette smokers following normal smoking and 24-hr smoking abstinence, with the order of normal smoking and abstinence sessions counterbalanced across participants. Other conditions included commodity (money and cigarettes), sign (gains and losses), and magnitude ($50 and $1,000). Results: Twenty four-hour smoking abstinence resulted in a reduction in expired carbon monoxide to near-zero levels and increases in withdrawal and craving. Examination of discounting parameters as a function of smoking abstinence revealed a general pattern of increase in the temporal discounting of monetary gains and losses following abstinence but not in the temporal discounting of cigarettes nor probability discounting of money or cigarettes. Pearson correlations also revealed an expected pattern of significant relationships. Conclusions: The present study is a comprehensive examination of temporal and probability discounting following smoking abstinence and reveals a generalized change in intertemporal decision making for monetary rewards.

This introductory article provides a short overview of empirical and theoretical articles presented in the special issue on psychological and neural models of intertemporal decision making, which is divided into 2 parts. The first part consists of contributions presenting different models of intertemporal choice. These contributions provide an overview of current conceptualizations; that is, providing several psychological and neural frameworks, investigating how memory processes are related to the anticipation of time, and showing how the perception of time underlies our decisions about the future. A final article deals with factors that influence choices on environmental policies where the consequences of decisions are delayed by decades or more. The second upcoming part is concerned with functional neuroimaging of intertemporal decision making. Two reviews of studies in neuroimaging and 2 empirical articles examine the questions of which brain regions (and associated functions) are involved in deciding on options with different temporal consequences. We hope this volume will be conducive in developing a better understanding of intertemporal decision making as part of complex sets of neural processes as well as psychological factors that include cognitive reasoning, emotional states, and the interconnected perception of time.

Many decisions require tradeoffs over time and in the presence of risk. To examine interactions between risk and intertemporal effects we developed a laboratory experiment. In the experiment, subjects choose between payoffs that take place at different points in time. We find that very few subjects are consistently risk averse or risk loving. Instead, we find that subjects are less patient in the presence of risk. We also find that increased risk decreases subjects’ patience levels. However, we do not find evidence that the effect of risk on the intertemporal decision depends on the length of the temporal delay.

Empirical research has shown that a lower feedback frequency combined with a longer bind-ing period decreases myopia and thereby increases the willingness to invest into a risky asset. In an experimental study, we disentangle the intertwined manipulation of feedback frequency and binding period to analyze how both variables alone contribute to the change in myopia and how they interact. We find a strong effect for the length of commitment, a much less pro-nounced effect for the feedback frequency, and a strong interaction between both variables. The results have important implications for real world intertemporal decision making.

Over the past several years, a subfield of the cognitive neuroscience of aging has emerged to investigate age differences in reward-based decision making across adulthood. The approach combines experimental methods, models, and theory from psychology, economics, and neuroscience to characterize age differences in decision making in the laboratory and in the real world. This chapter reviews what is presently known about how age differences in the structure and function of frontostriatal brain systems supporting reward-based decision making are related to age differences in sensitivity to monetary gains and losses, intertemporal decision making, risky decision making, and reward learning. Already this work has identified interesting divergent patterns across adulthood; in some situations, the elderly outperform young adults and in other situations they appear to make more mistakes. Taken together, the evidence suggests that older adults do well when making decisions that rely on accumulated life experience, and perform suboptimally in uncertain environments that require the fluid integration of novel information.

Humans frequently need to allocate resources across multiple time-steps. Economic theory proposes that subjects do so according to a stable set of intertemporal preferences, but the computational demands of such decisions encourage the use of formally less competent heuristics. Few empirical studies have examined dynamic resource allocation decisions systematically. Here we conducted an experiment involving the dynamic consumption over approximately 15 minutes of a limited budget of relief from moderately painful stimuli. We had previously elicited the participants’ time preferences for the same painful stimuli in one-off choices, allowing us to assess self-consistency. Participants exhibited three characteristic behaviors: saving relief until the end, spreading relief across time, and early spending, of which the last was markedly less prominent. The likelihood that behavior was heuristic rather than normative is suggested by the weak correspondence between one-off and dynamic choices. We show that the consumption choices are consistent with a combination of simple heuristics involving early-spending, spreading or saving of relief until the end, with subjects predominantly exhibiting the last two., Author Summary People often have to trade-off their present wellbeing against their future wellbeing, for example whether to go to an expensive restaurant today or put the money towards a future holiday. Many studies have examined how people make such trade-offs. However, the majority have done so by analyzing choices between one-off future outcomes. By contrast, real-world choices are often made sequentially, with today’s choices influencing the possibilities available tomorrow. This generates decision problems of near limitless complexity. To explore how people approach such decisions in a naturalistic (health-related) setting, we describe participants’ use of a limited budget of relief from moderately painful stimuli over a period of approximately 15 minutes. Participants showed a range of different behaviors, with the majority either conserving relief for the future, or preferring to spread relief evenly over time. Notably no participant consistently consumed the maximum allowable relief at the outset. We show that sequential decision-making behavior cannot easily be predicted from the results of simple one-off choices made at the beginning of the task.

The tendency to make unhealthy choices is hypothesized to be related to an individual's temporal discount rate, the theoretical rate at which they devalue delayed rewards. Furthermore, a particular form of temporal discounting, hyperbolic discounting, has been proposed to explain why unhealthy behavior can occur despite healthy intentions. We examine these two hypotheses in turn. We first systematically review studies which investigate whether discount rates can predict unhealthy behavior. These studies reveal that high discount rates for money (and in some instances food or drug rewards) are associated with several unhealthy behaviors and markers of health status, establishing discounting as a promising predictive measure. We secondly examine whether intention-incongruent unhealthy actions are consistent with hyperbolic discounting. We conclude that intention-incongruent actions are often triggered by environmental cues or changes in motivational state, whose effects are not parameterized by hyperbolic discounting. We propose a framework for understanding these state-based effects in terms of the interplay of two distinct reinforcement learning mechanisms: a "model-based" (or goal-directed) system and a "model-free" (or habitual) system. Under this framework, while discounting of delayed health may contribute to the initiation of unhealthy behavior, with repetition, many unhealthy behaviors become habitual; if health goals then change, habitual behavior can still arise in response to environmental cues. We propose that the burgeoning development of computational models of these processes will permit further identification of health decision-making phenotypes.

This paper sets forth and offers an explanation for preferences for the form of the timing of resolution of uncertainty; namely for uncertainty to be resolved all at one time rather than sequentially. The explanation is based on a weakening of the independence axiom, in particular on the notion of disappointment aversion developed in Gul's (1991) axiomatic model of preferences. Implications of this aversion are discussed for issues in finance, intertemporal decision making under uncertainty, high stakes risky situations and consumer self-regulation. The analysis encourages a formulation of preferences over all attributes of interest to the decision maker, including psychological satisfaction.

Intertemporal decision making involves decisions that have consequences that span several periods of time and often extend far into the future. The purpose of this paper is to discuss and highlight the differences associated with different evaluation methods designed to cope with the long-term impacts of a decision including discounting. The concepts and ideas are illustrated in the context of a decision about a nuclear waste facility. We show how applying different discounting methodologies can greatly affect the decision made, especially over long time periods. © 1998 John Wiley & Sons, Ltd.

This study compares time preference in the cases of certainty and risk. We analyze both matching and choice behavior. We find that violations of the stationarity axiom are restricted to matching behavior, both for certainty and risk. We also compare the discounting of certain and risky outcomes as well as the discounting of gains and losses. In matching tasks, certain outcomes are discounted more than risky ones. We could not confirm these results in a choice task. Gains and losses are not found to be discounted at different rates.

Humans have the ability to engage in prospective imagery to anticipate the future consequences of present behaviors (Suddendorf & Busby, 2005), but we often let our desire for immediate gratification lead us to devalue larger future consequences in favor of smaller immediate rewards. Discounting large future rewards in favor of smaller immediate rewards is known as delay discounting and increases with greater temporal distance between the rewards (Bickel & Marsch, 2001). One approach to reducing delay discounting is episodic future thinking (Atance & O'Neill, 2001). Episodic future thinking engages the episodic memory in prospectively experiencing future events (Atance & O'Neill, 2001; Schacter, Addis, & Buckner, 2007) and activates brain regions involved in prospective thinking (Benoit, Gilbert, & Burgess, 2011; Schacter et al., 2007). Episodic future thinking during intertemporal decision making reduces delay discounting, with the vividness of prospective imagery predicting the degree of the reduction (Peters & Buchel, 2010). The inability to delay gratification is related to obesity (Davis, Patte, Curtis, & Reid, 2010; Francis & Susman, 2009; Weller, Cook, Avsar, & Cox, 2008). Delay discounting predicts intake of energy-dense convenience foods in obese women (Appelhans et al., 2012), and poor impulse control predicts a lack of success in weight loss (Best et al., 2012). To determine episodic future thinking's effect on impulsive behavior, we assessed whether episodic future thinking, compared with engagement in a control imagery task, reduced impulsivity and energy intake in overweight and obese individuals.

People generally prefer an immediate reward to a delayed reward of the same amount. Such preferences can be understood in terms of temporal discounting. Most discounting experiments measure delayed reward value by having participants make a series of choices between an immediately available reward and a delayed reward. The choices are frequently hypothetical. Use of hypothetical rewards in most delay discounting experiments calls into question the validity of the results. Real rewards, which are of true interest, may produce results different from those of hypothetical rewards. The present experiment used a within-subject design to measure delay discounting of real and hypothetical rewards, and employed a range of real reward magnitudes that exceeded those used in previous delay discounting experiments, permitting a systematic test of a well-established finding. Results suggest that real rewards are discounted to a greater extent than hypothetical ones.

We study the behavior of individuals with present biased preferences who are involved in costly, long-run projects. By using generic cost and reward functions, we characterize the behaviors of the sophisticated, partial naive and naive types. We show that there may arise cases where naives needlessly put effort on projects they never complete. Moreover, in endogenous total cost projects, the naive types always end up completing projects of lesser quality than originally intended. By introducing a bonus motive, we show that the minimal incentive scheme to prevent inefficient procrastination involves an increasing reward structure for naives and that higher rewards are required for players with more severe self-control problems. We, then, characterize the behavior of partially naives who potentially learn self-preferences. We find that without learning self-preferences, partial naives behave either like sophisticates or naives depending on the level of naivete; with learning, if the learning pace is fast enough, procrastination until the deadline does not occur.

Disruption of function of left, but not right, lateral prefrontal cortex (LPFC) with low-frequency repetitive transcranial magnetic stimulation (rTMS) increased choices of immediate rewards over larger delayed rewards. rTMS did not change choices involving only delayed rewards or valuation judgments of immediate and delayed rewards, providing causal evidence for a neural lateral-prefrontal cortex-based self-control mechanism in intertemporal choice.

Evidence on effort-demanding tasks suggests that exerting effort is fatiguing and that the accumulation of fatigue negatively affects the performance on both simultaneous and sequential tasks. This paper introduces the notion of fatigue by assuming that a worker has a limited amount of renewable resources that are depleted when effort is exerted. As multiple equilibria and thresholds can emerge, the optimal intertemporal allocation of effort depends both on the fatigue accumulated by the worker and on the wage rate chosen by the firm. A principal should take this into account, because choosing a wage rate that equals the marginal product value is, in general, suboptimal. This holds even if the worker is expected to exert constant effort over time.

Subjective probabilities are now collected on a number of large household surveys with the objective of providing data to better understand intertemporal decision making. Comparison of subjective probabilities with actual outcomes shows that the probabilities have considerable predictive power in situations where individuals have considerable private information, such as survival and retirement. In contrast, the subjective probability of a stock market gain varies greatly across individuals even though no one has private information and the outcome is the same for everyone. An explanation is that there is considerable variation in accessing and processing information. Further, the subjective probability of a stock market gain is considerably lower than historical averages, providing an explanation for the relatively low frequency of stock holding. An important research objective will be to understand how individuals form their subjective probabilities.

In this research, we investigate the impact of significant life experiences on intertemporal decisions among young adults. A series of experiments focus specifically on the impact of experiencing the death of a close other by cancer. We show that such an experience, which bears information about time, is associated with making decisions that favor the long-term future over short-term interests (Studies 1 and 2). Underlying this effect appears to be increased salience and concreteness regarding one’s future life course, shifting focus away from the present toward the long run (Studies 3 and 4). Finally, we explore the shift caused by a cancer death of a public figure and examine its stability over time (Study 5). Implications for research on intertemporal decision making and the impact of life events on perceptions and preferences are discussed.

This paper investigates the decision making behaviour of individuals with respect to attributes considered relevant to the assessment of potential venture opportunities. Using a decision making experiment, we were able to consider the behaviour of individuals taking into account their risk and time preferences. We find that while the respondent as a whole placed most weight on the potential payoffs when considering the value of a venture opportunity, we find significant individual differences in preference weightings across the attributes used in the study. By using a series of hypothetical venture vignettes, we also find some evidence that these differences in preference weightings may be useful in predicting choice behaviour in a more realistic entrepreneurial environment.

This thesis deals with current discourse whether methods of neuroscience generate useful tools for standard economics to understand, predict and ideally guide behavior of humans, social groups and the whole economies. An initial methodological analysis concluded that the usefulness of neuroeconomics is still only potential, since this approach is not able to answer substantial questions of economics in better way than tools existing. Following sections of thesis summarized representative research in the field of decision neuroscience in the areas of intertemporal decisions, decision-making under risk and uncertainty and the strategic interactions, and social preferences respectively. It has been demonstrated that many findings of decision neuroscience offer a partial confirmation of specific economic models already or provide inspiration for creating new ones.

The feedback frequency and the length of commitment are two important features of investment alternatives in intertemporal decision-making. So far, empirical research has shown that a lower feedback frequency combined with a longer binding period decreases myopia and thereby increases the willingness to invest into a risky asset. Almost nothing is known, however, about the isolated effect of each variable and about a possible interaction of these variables. In an experimental study, we disentangle the intertwined manipulation of feedback frequency and binding period, commonly used in previous research, to analyse how both variables alone contribute to the change in myopia. We find a strong effect depending on the length of commitment, a much less pronounced effect of feedback and a strong interaction between both variables. The results have important implications for real world intertemporal decision-making.

It is shown that the use of a social discount rate to evaluate a (public) project is incompatible with the Pareto principle and a condition of consumer sovereignty.

Optimal intertemporal decision making in a stochastic environment requires considerable analytical skills. Boundedly rational decision makers typically fail in achieving the best outcome. Thus, experimental studies of intertemporal decision making (see the selective survey1 of Anderhub and Guth, 1999) may offer stylized facts which can guide our intuition about how boundedly rational decision makers generate choices.