How I Decide Depends on What I Spend: Use of Heuristics is Greater for Time than for Money
29 Pages Posted: 2 Sep 2007
We demonstrate that decision making is more heuristic in situations that involve spending time rather than money. Relative to participants in the money condition, those in the time condition show a higher propensity to choose a compromise option (experiment 1), and rely on an arbitrary anchor (experiment 2). We propose that such heuristics are used more in time because, compared to monetary expenditures, temporal expenditures are harder to account for. Consistent with this proposition, when participants in both time and money conditions are primed to account for their expenditures, they no longer differ in their use of heuristics. The associated response times offer additional process evidence (experiment 3).
Keywords: Time and Money, Information Search, Judgment and Decision Making, BDT, Consumer Psychology, Compromise Effect, Anchoring
JEL Classification: M3, D8, C91
Suggested Citation: Suggested Citation