Intangibility in intertemporal choice
Open accessAbstract
Since the advent of the discounted utility (DU) model, economists have thought about intertemporal choice in very specific terms. DU assumes that people make explicit trade-offs between costs and benefits occurring at different points in time. While this explicit trade-off perspective is simple and tractable, and has stimulated productive research, it does not provide a very realistic representation of a wide range of the most important intertemporal trade-offs that people face in daily life. If one considers the most important and commonly discussed examples of intertemporal choices, a striking pattern emerges: in almost all cases, early outcomes tend to be concrete (e.g. purchasing this latte), but later outcomes tend to be much less tangible (e.g. the unknown item that could have been purchased later with the money spent on this latte). We propose that people rely on anticipatory emotions as a proxy for intangible outcomes when trade-offs are implicit. This paper reviews neuroeconomic evidence that has begun to elucidate the role of anticipatory emotions in decisions involving intangible outcomes. Although most progress has been made in the domain of spending and saving, we discuss how the existing neuroeconomic research could be extended to other domains where trade-offs are ill defined.
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Some theoretical models of discounting hypothesize that delayed outcomes are less concrete or less vivid than immediate outcomes, and therefore individuals tend to prefer immediate outcomes over delayed ones.
“Some theoretical models of discounting hypothesize that delayed outcomes are less concrete or less vivid than immediate outcomes, and therefore individuals tend to prefer immediate outcomes over delayed ones (Rick & Loewenstein, 2008; Trope & Liberman, 2003).”
From Behavioral trainings and manipulations to reduce delay discounting: A systematic review (2019) · cites this paper as Rick & Loewenstein, 2008
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- Authors
- Rick, S., & Loewenstein, G.
- Affiliations
- University of Pennsylvania (US)
- Carnegie Mellon University (US)
- Corresponding author
- Rick, Scott
- Venue
- Philosophical Transactions of the Royal Society B: Biological Sciences
- Publisher
- The Royal Society
- Published
- 2008-10
- Volume
- 363
- Issue
- 1511
- Pages
- 3813-3824
- ISSN
- 0962-8436 (ISSN-L)
- 1471-2970
- PMC
- PMC2607360
- OpenAlex
- W3123347571
- Cited by
- 95
- References
- 80
- Citations by year
- 2026: 3 · 2025: 3 · 2024: 2 · 2023: 8 · 2022: 9 · 2021: 5 · 2020: 3 · 2019: 5 · 2018: 3 · 2017: 4 · 2016: 3 · 2015: 6 · 2014: 6 · 2013: 8 · 2012: 8
- FWCI
- 0.58
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- Philosophical Transactions of the Royal Society B Biological Sciences (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- PubMed Central (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Life Sciences › Neuroscience › Cognitive Neuroscience › Neural and Behavioral Psychology Studies
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Keywords
- intertemporal choice, intangible outcomes, anticipatory emotions, discounted utility, neuroeconomics, time preference, decision-making
- MeSH terms
- Brain, Decision Making, Emotions, Humans, Models, Biological, Time Factors, Models, Economic
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