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The Psychology of Intertemporal Discounting: Why are Distant Events Valued Differently from Proximal Ones?

  • Dilip Soman

    ()

  • George Ainslie
  • Shane Frederick
  • Xiuping Li
  • John Lynch
  • Page Moreau
  • Andrew Mitchell
  • Daniel Read
  • Alan Sawyer
  • Yaacov Trope
  • Klaus Wertenbroch
  • Gal Zauberman
Registered author(s):

    Research in intertemporal choice has been done in a variety of contexts, yet there is a remarkable consensus that future outcomes are discounted (or undervalued) relative to immediate outcomes. In this paper, we (a) review some of the key findings in the literature, (b) critically examine and articulate implicit assumptions, (c) distinguish between intertemporal effects arising due to time preference versus those due to changes in utility as a function of time, and (d) identify issues and questions that we believe serve as avenues for future research. Copyright Springer Science + Business Media, Inc. 2005

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    File URL: http://hdl.handle.net/10.1007/s11002-005-5897-x
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    Article provided by Springer in its journal Marketing Letters.

    Volume (Year): 16 (2005)
    Issue (Month): 3 (December)
    Pages: 347-360

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    Handle: RePEc:kap:mktlet:v:16:y:2005:i:3:p:347-360
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    1. Schelling, Thomas C, 1984. "Self-Command in Practice, in Policy, and in a Theory of Rational Choice," American Economic Review, American Economic Association, vol. 74(2), pages 1-11, May.
    2. Soman, Dilip, 2004. "The effect of time delay on multi-attribute choice," Journal of Economic Psychology, Elsevier, vol. 25(2), pages 153-175, April.
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    7. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
    8. Charles T. Clotfelter & Ronald G. Ehrenberg & Malcolm Getz & John J. Siegfried, 1991. "References," NBER Chapters, in: Economic Challenges in Higher Education, pages 393-410 National Bureau of Economic Research, Inc.
    9. Zauberman, Gal, 2003. " The Intertemporal Dynamics of Consumer Lock-In," Journal of Consumer Research, University of Chicago Press, vol. 30(3), pages 405-19, December.
    10. Read, Daniel & van Leeuwen, Barbara, 1998. "Predicting Hunger: The Effects of Appetite and Delay on Choice, , , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(2), pages 189-205, November.
    11. Read, Daniel, 2001. " Is Time-Discounting Hyperbolic or Subadditive?," Journal of Risk and Uncertainty, Springer, vol. 23(1), pages 5-32, July.
    12. Hoch, Stephen J & Loewenstein, George F, 1991. " Time-Inconsistent Preferences and Consumer Self-Control," Journal of Consumer Research, University of Chicago Press, vol. 17(4), pages 492-507, March.
    13. Loewenstein, George, 1996. "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 272-292, March.
    14. Samuel H. Preston & Michael R. Haines, 1991. "References," NBER Chapters, in: Fatal Years: Child Mortality in Late Nineteenth-Century America, pages 237-258 National Bureau of Economic Research, Inc.
    15. Klaus Wertenbroch, 1998. "Consumption Self-Control by Rationing Purchase Quantities of Virtue and Vice," Marketing Science, INFORMS, vol. 17(4), pages 317-337.
    16. George F. Loewenstein, 1988. "Frames of Mind in Intertemporal Choice," Management Science, INFORMS, vol. 34(2), pages 200-214, February.
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