Work

Towards a General Model of Temporal Discounting

Year: 2012

Type: article

Abstract: Psychological models of temporal discounting have now successfully displaced classical economic theory due to the simple fact that many common behavior patterns, such as impulsivity, were unexplainable with classic models. However, the now dominant hyperbolic model of discounting is itself becoming increasingly strained. Numerous factors have arisen that alter discount rates with no means to incorporate the different influences into standard hyperbolic models. Furthermore, disparate literatures are emerging that propose theoretical constructs that are seemingly independent of hyperbolic discounting. We argue that, although hyperbolic discounting provides an eminently useful quantitative measure of discounting, it fails as a descriptive psychological model of the cognitive processes that produce intertemporal preferences. Instead, we propose that recent contributions from cognitive neuroscience indicate a path for developing a general model of time discounting. New data suggest a means by which neuroscience-based theory may both integrate the diverse empirical data on time preferences and merge seemingly disparate theoretical models that impinge on time preferences.

Source: Journal of the Experimental Analysis of Behavior

DOI: 10.1002/jeab.6

Authors: Wouter van den Bos, Samuel M. McClure

Institution: Stanford University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funders: U.S. Public Health Service, National Institute of Mental Health

Awards: G5754988063, Developmental Changes in Neural Processes Underlying Inattention, Impulsivity and Regulation