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Psychophysics of time perception and valuation in temporal discounting of gain and loss

  • Han, Ruokang
  • Takahashi, Taiki
Registered author(s):

    Anomalies in intertemporal choice (e.g. “hyperbolic” discounting and sign effect) have been investigated in econophysics and behavioral neuroeconomics. We experimentally examined the roles of psychophysical effects of time perception and subjective valuation of outcomes (value function) on temporal discounting of gain and loss, by utilizing a q-exponential temporal discounting model developed in Tsallis’s thermostatistics. Consequently, we demonstrated that both “hyperbolic” discounting and the sign effect (i.e. gain is more steeply time-discounted than loss) are due to psychophysical effects of time perception (i.e., nonlinearity and gain–loss asymmetry). Implications of the present study for neuroeconomics and econophysics are discussed.

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    Article provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.

    Volume (Year): 391 (2012)
    Issue (Month): 24 ()
    Pages: 6568-6576

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    Handle: RePEc:eee:phsmap:v:391:y:2012:i:24:p:6568-6576
    Contact details of provider: Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/

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