Chapter 10: Quantitative Models of Discounting

TL;DR

This chapter offers a step-by-step tutorial on analyzing delay discounting data using a two-stage approach, which involves estimating individual discounting rates and examining their relationships with relevant variables.

Contribution

It introduces a clear, statistically sound two-stage method for analyzing delay discounting data, enhancing the rigor of behavioral economic research.

Findings

Provides a detailed tutorial on the two-stage analysis approach

Demonstrates how to compare discounting rates across groups

Emphasizes statistical defensibility of the method

Abstract

This chapter provides a tutorial that the reader can follow towards analyzing discounting data. Previous chapters have already described the breadth of outcomes associated with discounting (Odum et al. 2020) and other background information (Odum 2011). We focus on delay discounting, where indifference points describe the value of a delayed reward that a participant would be willing to accept in order to have the reward immediately for a variety of delays. This chapter describes the two-stage approach to analyzing discounting data, as this is the simplest approach that is also statistically defensible. The two-stage approach first quantifies the discounting rate of each participant individually, and second stage analyzes these rates as a function of relevant variables (e.g., between smokers and non-smokers)