Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better Than Delay Discounting Does

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Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better Than Delay Discounting Does

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Title: Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better Than Delay Discounting Does
Author: Marzilli Ericson, K. M.; White, J. M.; Laibson, David I.; Cohen, J. D.

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Citation: Marzilli Ericson, K. M., J. M. White, D. Laibson, and J. D. Cohen. 2015. “Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better Than Delay Discounting Does.” Psychological Science 26 (6) (April 24): 826–833. doi:10.1177/0956797615572232.
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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.
Published Version: doi:10.1177/0956797615572232
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:30367415
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