Resource Slack and Propensity to Discount Delayed Investments of Time Versus Money

Abstract

We demonstrate that people discount delayed task outcomes due to perceived changes over time in supplies of slack. Slack is the perceived surplus of a given resource available to complete a focal task. For temporally near events, investing a resource for one purpose may cause one to fail to attain other short-term goals requiring the same resource, but only if little slack exists. If people foresee less resource competition in the future, they will appear to discount that resource steeply. We use this framework to explain differential propensity to delay investments of time and money. In seven experiments, we demonstrate that systematic temporal shifts of perceived slack determine the extent and the pattern of delay discounting.

Keywords: Time, intetemporal choice, hyperbolic discounting

JEL Classification: D9, M0, M3