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

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  • Dilip Soman

    ()

  • George Ainslie
  • Shane Frederick
  • Xiuping Li
  • John Lynch
  • Page Moreau
  • Andrew Mitchell
  • Daniel Read
  • Alan Sawyer
  • Yaacov Trope
  • Klaus Wertenbroch
  • Gal Zauberman

Abstract

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

Suggested Citation

  • Dilip Soman & George Ainslie & Shane Frederick & Xiuping Li & John Lynch & Page Moreau & Andrew Mitchell & Daniel Read & Alan Sawyer & Yaacov Trope & Klaus Wertenbroch & Gal Zauberman, 2005. "The Psychology of Intertemporal Discounting: Why are Distant Events Valued Differently from Proximal Ones?," Marketing Letters, Springer, vol. 16(3), pages 347-360, December.
  • Handle: RePEc:kap:mktlet:v:16:y:2005:i:3:p:347-360
    DOI: 10.1007/s11002-005-5897-x
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why are distant events valued differently from proximal ones?
      by Miguel in Simoleon Sense on 2011-08-18 21:12:26

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    Cited by:

    1. Sezer Ülkü & Claudiu V. Dimofte & Glen M. Schmidt, 2012. "Consumer Valuation of Modularly Upgradeable Products," Management Science, INFORMS, vol. 58(9), pages 1761-1776, September.
    2. Rogers, Todd & Bazerman, Max H., 2008. "Future lock-in: Future implementation increases selection of 'should' choices," Organizational Behavior and Human Decision Processes, Elsevier, vol. 106(1), pages 1-20, May.
    3. Dumas, Jean-Malik, 2016. "Essays in behavioral strategy," Other publications TiSEM a04c1b1b-eeed-48ad-894b-7, Tilburg University, School of Economics and Management.
    4. Andreas Oehler & Christina Werner, 2008. "Saving for Retirement—A Case for Financial Education in Germany and UK? An Economic Perspective," Journal of Consumer Policy, Springer, vol. 31(3), pages 253-283, September.
    5. Takahashi, Taiki & Hadzibeganovic, Tarik & Cannas, Sergio & Makino, Takaki & Fukui, Hiroki & Kitayama, Shinobu, 2009. "Cultural neuroeconomics of intertemporal choice," MPRA Paper 16814, University Library of Munich, Germany.
    6. Tim Benning & Els Breugelmans & Benedict Dellaert, 2012. "Consumers’ evaluation of allocation policies for scarce health care services: Vested interest activation trumps spatial and temporal distance," Marketing Letters, Springer, vol. 23(3), pages 531-543, September.
    7. Stefan Scherbaum & Simon Frisch & Susanne Leiberg & Steven J. Lade & Thomas Goschke & Maja Dshemuchadse, 2016. "Process dynamics in delay discounting decisions: An attractor dynamics approach," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 11(5), pages 472-495, September.
    8. Tomasz Kopczewski, 2015. "Think not calculate! Implementation of Felix Klein postulates in economic education with CAS software," Working Papers 2015-38, Faculty of Economic Sciences, University of Warsaw.
    9. repec:dau:papers:123456789/3033 is not listed on IDEAS
    10. Marcus T. Wolfe & Pankaj C. Patel, 2017. "Instant gratification: temporal discounting and self-employment," Small Business Economics, Springer, vol. 48(4), pages 861-882, April.
    11. Franziska Ziegelmeyer, 2010. "Elterliche Stellvertreterentscheidungen und frühkindliche Humankapitalbildung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 79(3), pages 57-77.
    12. de La Bruslerie, Hubert & Pratlong, Florent, 2012. "La valeur psychologique du temps : une synthèse de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(3), pages 361-400, Septembre.
    13. Linda Court Salisbury & Fred M. Feinberg, 2010. "—Temporal Stochastic Inflation in Choice-Based Research," Marketing Science, INFORMS, vol. 29(1), pages 32-39, 01-02.
    14. Peeters R.J.A.P. & Méder Z.Z. & Flesch J., 2014. "Naiveté and sophistication in dynamic inconsistency," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).

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