Sense of control matters: A long spatial distance leads to a short-term investment preference

Increasingly, we can invest in projects that are distributed around the world through online investment platforms. Will the spatial distance between these projects and ourselves affect our investment preferences? The present research aims to experimentally examine the impact of spatial distance on intertemporal preferences for investment returns and to explore the underlying mediating effect of the sense of control. Three studies were devised to address this topic. Studies 1 and 2 used two methods to manipulate the spatial distance between the location of investment projects and the location of investors. Participants were more impatient with investment returns when the investment project was located farther away. In other words, they preferred lower but earlier returns in intertemporal choice. Moreover, participants’ sense of control over the investment project mediated the relationship between spatial distance and intertemporal preferences. Using a priming method, Study 3 showed that participants’ impatience for investment returns in investments with different spatial distances could be remedied by giving them generalized control. Theoretical implications for studies regarding psychological distance and intertemporal decision making and practical implications for investments are discussed.