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ERIC Number: EJ1008777
Record Type: Journal
Publication Date: 2013-Mar
Pages: 16
Abstractor: As Provided
Reference Count: 51
ISSN: ISSN-0278-7393
Drift: An Analysis of Outcome Framing in Intertemporal Choice
Read, Daniel; Frederick, Shane; Scholten, Marc
Journal of Experimental Psychology: Learning, Memory, and Cognition, v39 n2 p573-588 Mar 2013
People prefer to receive good outcomes immediately rather than wait, and they must be compensated for waiting. But what influences their decision about how much compensation is required for a given wait? To give a partial answer to this question, we develop the DRIFT model, a heuristic description of how framing influences intertemporal choice. We describe 4 experiments showing the implications of this model. In the experiments, we vary how the difference between a smaller sooner outcome and a larger later outcome is framed--either as total interest earned, as an interest rate, or as total amount earned (the conventional frame in studies of intertemporal choice)--and whether the larger later outcome is described as resulting from the investment of the smaller sooner one. These alternate frames have several effects. First, the investment language increases patience. Second, the explicit provision of the (otherwise implicit) experimental interest rate sharply reduces the magnitude effect. Correspondingly, we find that interest frames increase patience when the rewards are small, but they decrease patience when they are large. Third, the interest-rate frame induces somewhat "greater" discounting for longer time periods and, thus, reverses the common finding of "hyperbolic" discounting. Thus, many of the "stylized facts" implied by studies involving choices between a smaller sooner and a larger later amount are eliminated or reverse under alternate outcome frames. (Contains 4 tables, 7 figures and 8 footnotes.)
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Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A