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Mental Zooming as Variable Asset Integration in Inter-Temporal Choice

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  • Stein T. Holden

    (Norwegian University of Life Sciences, Norway)

  • Dag Einar Sommervoll

    (Norwegian University of Life Sciences, Norway & Norwegian University of Science and Technology, Norway)

  • Mesfin Tilahun

    (Mekelle University, Ethiopia)

Abstract

Our time preferences deviate systematically from that of Homo economicus. They seem to be driven by a form of mental zooming, where higher and more distant amounts induce a more holistic perspective in contrast to smaller and near future amounts. We model zooming as variable asset integration and ask whether this can explain the observed variation in discount rates in experiments. It can. Equally important, the zooming for both time and magnitude is similar across two countries (Ethiopia and Malawi) and within a country (Ethiopia).

Suggested Citation

  • Stein T. Holden & Dag Einar Sommervoll & Mesfin Tilahun, 2022. "Mental Zooming as Variable Asset Integration in Inter-Temporal Choice," International Journal of Applied Behavioral Economics (IJABE), IGI Global, vol. 11(1), pages 1-21, January.
    • Handle: RePEc:igg:jabe00:v:11:y:2022:i:1:p:1-21
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    References listed on IDEAS

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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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