Deferring Versus Expediting Consumption: The Effect of Outcome Concreteness on Sensitivity to Time Horizon

Abstract

This work examines consumers' preferences for consumption timing. Specifically, we examine how temporal framing (deferring vs. expediting) of a decision moderates the sensitivity of consumers' pattern of discounting to changes in time horizon. In three experiments, we show greater decline in consumers' discount rates with time horizon (i.e., greater present bias) when deferring than when expediting consumption. The results are robust to using monetary and non-monetary outcomes, as well as to different time horizons (months, days). We further demonstrate that this difference in sensitivity is moderated by the different levels of mental representations (concreteness) triggered by the two decision frames.

Keywords: Intertemporal Choice, Temporal Framing, Hyperbolic Discounting, Temporal Construal

JEL Classification: D90, M0, M30