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Transactional problem content in cost discounting: parallel effects for probability and delay

Jones, S. and Oaksford, Mike (2011) Transactional problem content in cost discounting: parallel effects for probability and delay. Journal of Experimental Psychology: Learning, Memory, and Cognition 37 (3), pp. 739-747. ISSN 0278-7393.

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Official URL: http://dx.doi.org/10.1037/a0022219

Abstract

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.

Item Type: Article
Keyword(s) / Subject(s): probability, delay, discounting, transaction, costs
School or Research Centre: Birkbeck Schools and Research Centres > School of Science > Psychological Sciences
Depositing User: Administrator
Date Deposited: 11 May 2011 13:39
Last Modified: 17 Apr 2013 12:20
URI: http://eprints.bbk.ac.uk/id/eprint/3274

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