Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better Than Delay Discounting Does
Marzilli Ericson, K. M.
White, J. M.
Cohen, J. D.
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CitationMarzilli 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.
AbstractHeuristic 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:30367415
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