Discounting Time and Time Discounting: Subjective Time Perception and Intertemporal Preferences

53 Pages Posted: 3 May 2018

See all articles by Gal Zauberman

Gal Zauberman

Yale

B. Kyu Kim

Independent

Selin A. Malkoc

Fisher College of Business, The Ohio State University

James R. Bettman

Duke University - Fuqua School of Business

Date Written: March 2008

Abstract

Consumers often make decisions about outcomes and events that occur over time. This research examines consumers’ sensitivity to the prospective duration relevant to their decisions and the implications of such sensitivity for intertemporal trade-offs, especially the degree of present bias (i.e., hyperbolic discounting). The authors show that participants’ subjective perceptions of prospective duration are not sufficiently sensitive to changes in objective duration and are nonlinear and concave in objective time, consistent with psychophysical principles. More important, this lack of sensitivity can explain hyperbolic discounting. The results replicate standard hyperbolic discounting effects with respect to objective time but show a relatively constant rate of discounting with respect to subjective time perceptions. The results are replicated between subjects (Experiment 1) and within subjects (Experiments 2), with multiple time horizons and multiple descriptors, and with different measurement orders. Furthermore, the authors show that when duration is primed, subjective time perception is altered (Experiment 4) and hyperbolic discounting is reduced (Experiment 3).

Keywords: Hyperbolic Discounting, Present Bias, Time Perception, Weber–Fechner Law

Suggested Citation

Zauberman, Gal and Kim, B. Kyu and Malkoc, Selin A. and Bettman, James R., Discounting Time and Time Discounting: Subjective Time Perception and Intertemporal Preferences (March 2008). Yale ICF Working Paper No. 2018-10. Available at SSRN: https://ssrn.com/abstract=2164506 or http://dx.doi.org/10.2139/ssrn.2164506

Gal Zauberman

Yale ( email )

165 Whitney Avenue
New Haven, CT 06511
United States

B. Kyu Kim

Independent ( email )

No Address Available

Selin A. Malkoc (Contact Author)

Fisher College of Business, The Ohio State University ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

HOME PAGE: http://https://fisher.osu.edu/people/malkocgoodman.1

James R. Bettman

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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