Psychological Connectedness and Intertemporal Choice
Coauthor(s): Lance J. Rips.
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People tend to attach less value to a good if they know a delay will occur before they obtain it. For example, people value receiving $100 tomorrow more than receiving $100 in 10 years. We explored one reason for this tendency (due to Parfit, 1984): In terms of psychological properties, such as beliefs,values, and goals, the decision maker is more closely linked to the person (his or her future self) receiving
$100 tomorrow than to the person receiving $100 in 10 years. For this reason, he or she prefers his or her nearer self to have the $100 rather than his or her more remote self. Studies 1 and 2 showed that the greater the rated psychological connection between 2 parts of a participant's life, the less he or she discounted future monetary and nonmonetary benefits (e.g., good days at work) over that interval. In
Studies 3–5, participants read about characters who undergo large life-changing (and connectedness weakening) events at different points in their lives and then made decisions about the timing of benefits
on behalf of these characters. All 5 studies revealed a relation between perceived psychological connectedness and intertemporal choice: Participants preferred benefits to occur before large changes in connectedness but preferred costs to occur after these changes.
Source: Journal of Experimental Psychology: General
Bartels, Daniel, and Lance J. Rips. "Psychological Connectedness and Intertemporal Choice." Journal of Experimental Psychology: General 139, no. 1 (February 2010): 49-69.