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ERIC Number: EJ934230
Record Type: Journal
Publication Date: 2011-May
Pages: 9
Abstractor: As Provided
Reference Count: 34
ISSN: ISSN-0278-7393
Transactional Problem Content in Cost Discounting: Parallel Effects for Probability and Delay
Jones, Stephen; Oaksford, Mike
Journal of Experimental Psychology: Learning, Memory, and Cognition, v37 n3 p739-747 May 2011
Four experiments investigated the effects of transactional content on temporal and probabilistic discounting of costs. Kusev, van Schaik, Ayton, Dent, and Chater (2009) have shown that content other than gambles can alter decision-making behavior even when associated value and probabilities are held constant. Transactions were hypothesized to lead to similar effects because the cost to a purchaser always has a linked gain, the purchased commodity. Gain amount has opposite effects on delay and probabilistic discounting (e.g., Benzion, Rapoport, & Yagil, 1989; Green, Myerson, & Ostaszewski, 1999), a finding that is not consistent with descriptive decision theory (Kahneman & Tversky, 1979; Loewenstein & Prelec, 1992). However, little or no effect on discounting has been observed for losses or costs. Experiment 1, using transactions, showed parallel effects for temporal and probabilistic discounting: Smaller amounts were discounted more than large amounts. As the cost rises, people value the commodity more, and they consequently discount less. Experiment 2 ruled out a possible methodological cause for this effect. Experiment 3 replicated Experiment 1. Experiment 4, using gambles, showed no effect for temporal discounting, because of the absence of the linked gain, but the same effect for probabilistic discounting, because prospects implicitly introduce a linked gain (Green et al., 1999; Prelec & Loewenstein, 1991). As found by Kusev et al. (2009), these findings are not consistent with decision theory and suggest closer attention should be paid to the effects of content on decision making. (Contains 4 figures and 1 footnote.)
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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