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Time Matters Less When Outcomes Differ: Unimodal vs. Cross-Modal Comparisons in Intertemporal Choice

Author

Listed:
  • Robin Cubitt

    (School of Economics and Centre for Decision Research and Experimental Economics, University of Nottingham, Nottingham NG7 2RD, United Kingdom)

  • Rebecca McDonald

    (Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom)

  • Daniel Read

    (Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom)

Abstract

Unimodal intertemporal decisions involve comparing options of the same type (e.g., apples now versus apples later), and cross-modal decisions involve comparing options of different types (e.g., a car now versus a vacation later). As we show, existing models of intertemporal choice do not allow time preference to depend on whether the comparisons to be made are unimodal or cross-modal. We test this restriction in an experiment using the delayed compensation method , a new extension of the standard method of eliciting intertemporal preferences that allows for assessment of time preference for nonmonetary and discrete outcomes, as well as for both cross-modal and unimodal comparisons. Participants were much more averse to delay for unimodal than cross-modal decisions. We provide two potential explanations for this effect: one drawing on multiattribute choice, the other drawing on construal-level theory.

Suggested Citation

  • Robin Cubitt & Rebecca McDonald & Daniel Read, 2018. "Time Matters Less When Outcomes Differ: Unimodal vs. Cross-Modal Comparisons in Intertemporal Choice," Management Science, INFORMS, vol. 64(2), pages 873-887, February.
    • Handle: RePEc:inm:ormnsc:v:64:y:2018:i:2:p:-873-887
    DOI: 10.287/mnsc.2016.2613
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