Lecture 13 Flashcards
The sign effect
We discount losses less than gains. That is, losses retain more of their value over time than gains
The magnitude effect
We discount large magnitudes less than small ones - more willing to delay. Even if proportion is the same, 110 -> 100 is not the same as 11 -> 10.
Delay/accelerate frame effects
Delay format places now as default; using accelerate/future as default option, people become more patient, there are smaller discount rates and lower indifference points
Weight of the immediate option
People are more patient if both options are in the future - something about immediacy carries more weight - analogue of the Prospect Theory certainty effect
Reflection effect
Magnitude effect and delay/accelerate effect are reversed for losses. Discount large losses more than small ones, and discount more in accelerate frame than in delay
Domain effects
We discount things other than money too, such as the environment and health
Intertemporal choice
Any decisions that occur in two time periods
Discounting in money vs. health
Discounting processes are similar but health discounting is independent of financial - people who discount money strongly are not necessarily the same ones who discount health strongly
Outcome streams
People typically prefer increasing payoffs to decreasing payoffs
Anticipation
Explains why it is best to postpone positive outcomes and speed up negative ones. This leads to negative discounting!!
Psychological distance
Discounting happens b/c our future selves feel different from our current selves, far away events feel different from local events, things that are very uncertain or not observable feel
very different than things that are certain, etc.
Construal
High-level construal = abstract; low-level construal = concrete. The more abstract, the more psychological distance and the more discounting and less action.
