Influence of time delay on choice between gambles: Savoring the emotion
AbstractIn two laboratory studies involving 285 undergraduate students presented with a one-shot real choice we observe a systematic influence of time delay on the preferences for two lotteries, equal in expected value, but different in the degree of probability and outcome. The more the outcome is postponed (2 weeks, 1 month, 3 months, 6 months), the more individuals prefer the lottery offering a higher value (400 Euro) but a lower probability (.02) compared to the one offering a lower value (14 Euro) but a higher probability (.60). We explain these findings assuming a savoring hypothesis according to which, for highly emotional events, individuals prefer to postpone the desirable outcome, enjoying the savoring experience of anticipating the future emotions. It also suggests that for decisions where uncertainty resolution is postponed in the future, people will underweight the probability and overweight the outcome.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia in its series CEEL Working Papers with number 0802.
Date of creation: 2008
Date of revision:
intertemporal choice; time delay; time horizon; gambles; risk;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-23 (All new papers)
- NEP-CBE-2008-02-23 (Cognitive & Behavioural Economics)
- NEP-EXP-2008-02-23 (Experimental Economics)
- NEP-UPT-2008-02-23 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Loewenstein, George & Prelec, Drazen, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 573-97, May.
- Kivetz, Ran & Simonson, Itamar, 2002. " Self-Control for the Righteous: Toward a Theory of Precommitment to Indulgence," Journal of Consumer Research, University of Chicago Press, vol. 29(2), pages 199-217, September.
- Laibson, David, 1997.
"Golden Eggs and Hyperbolic Discounting,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(2), pages 443-77, May.
- Loewenstein, George, 1987. "Anticipation and the Valuation of Delayed Consumption," Economic Journal, Royal Economic Society, vol. 97(387), pages 666-84, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marco Tecilla).
If references are entirely missing, you can add them using this form.