The role of time estimation in decreased impatience in Intertemporal Choice

TL;DR

This study investigates how cognitive processes, especially nonlinear time perception, influence impatience and inconsistency in intertemporal choices, revealing individual differences in temporal bias and discounting behavior.

Contribution

It demonstrates that nonlinear temporal perception partly explains discounting inconsistencies, emphasizing the need for individual assessments in intertemporal choice models.

Findings

Power functions better fit temporal estimates for 65% of participants

Hyperbolic discounting best describes 63% of choice patterns

Temporal bias explains some, but not all, discounting inconsistencies

Abstract

The role of specific cognitive processes in deviations from constant discounting in intertemporal choice is not well understood. We evaluated decreased impatience in intertemporal choice tasks independent of discounting rate and non-linearity in long-scale time representation; nonlinear time representation was expected to explain inconsistencies in discounting rate. Participants performed temporal magnitude estimation and intertemporal choice tasks. Psychophysical functions for time intervals were estimated by fitting linear and power functions, while discounting functions were estimated by fitting exponential and hyperbolic functions. The temporal magnitude estimates of 65% of the participants were better fit with power functions (mostly compression). 63% of the participants had intertemporal choice patterns corresponding best to hyperbolic functions. Even when the perceptual bias in the temporal magnitude estimations was compensated in the discounting rate computation, the data of 8 out of 14 participants continued exhibiting temporal inconsistency. The results suggest that temporal inconsistency in discounting rate can be explained to different degrees by the bias in temporal representations. Non-linearity in temporal representation and discounting rate should be evaluated on an individual basis. Keywords: Intertemporal choice, temporal magnitude, model comparison, impatience, time inconsistency