title: Money earlier or later? Simple heuristics explain intertemporal choices better than delay discounting does.
abstract: Heuristic models have been proposed for many domains involving choice. We conducted an out-of-sample, cross-validated comparison of heuristic models of intertemporal choice (which can account for many of the known intertemporal choice anomalies) and discounting models. Heuristic models outperformed traditional utility-discounting models, including models of exponential and hyperbolic discounting. The best-performing models predicted choices by using a weighted average of absolute differences and relative percentage differences of the attributes of the goods in a choice set. We concluded that heuristic models explain time-money trade-off choices in experiments better than do utility-discounting models.
authors.affiliation: School of Management, Boston University National Bureau of Economic Research, Cambridge, Massachusetts kericson@bu.edu.
authors.forename: Keith M Marzilli
authors.initials: KM
authors.lastname: Ericson
authors.affiliation: Department of Psychology, Princeton University.
authors.forename: John Myles
authors.initials: JM
authors.lastname: White
authors.affiliation: National Bureau of Economic Research, Cambridge, Massachusetts Department of Economics, Harvard University.
authors.forename: David
authors.initials: D
authors.lastname: Laibson
authors.affiliation: Department of Psychology, Princeton University Princeton Neuroscience Institute, Princeton University.
authors.forename: Jonathan D
authors.initials: JD
authors.lastname: Cohen
mesh_terms: D065786:Delay Discounting; D000066506:Heuristics; D006801:Humans; D007600:Judgment; D008960:Models, Psychological; D012201:Reward; D013997:Time Factors
keywords: decision making; delay of gratification; heuristics; judgment; open data