Discounting in judgments of delay and probability

Rachlin, Howard; Brown, Jay C.; Cross, David V.

doi:10.1002/(sici)1099-0771(200004/06)13:2<145::aid-bdm320>3.0.co;2-4

Cited by 82 publications

(55 citation statements)

References 20 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Such a hyperbolic function is supported by empirical research, at least in humans (Kacelnik, 1997b;Rachlin, Brown, & Cross, 2000;Rachlin et al, 1986Rachlin et al, , 1991Rachlin & Siegel, 1994;Richards, Zhang, Mitchell, & de Wit, 1999). Ho et al (1999) further suggest that hyperbolic processes of discounting apply to the delay, probability (odds), and magnitude of a reward, and that these three discounting processes are independent, multiplicative, and each governed by its own discounting parameter (K for delay, H for probability/odds, Q for magnitude) that is relatively stable for an individual.…”

Section: Uncertainty Discountingmentioning

confidence: 85%

Neural systems implicated in delayed and probabilistic reinforcement

2006

View full text Add to dashboard Cite

This review considers the theoretical problems facing agents that must learn and choose on the basis of reward or reinforcement that is uncertain or delayed, in implicit or procedural (stimulus-response) representational systems and in explicit or declarative (action-outcome-value) representational systems. Individual differences in sensitivity to delays and uncertainty may contribute to impulsivity and risk taking. Learning and choice with delayed and uncertain reinforcement are related but in some cases dissociable processes. The contributions to delay and uncertainty discounting of neuromodulators including serotonin, dopamine, and noradrenaline, and of specific neural structures including the nucleus accumbens core, nucleus accumbens shell, orbitofrontal cortex, basolateral amygdala, anterior cingulate cortex, medial prefrontal (prelimbic/infralimbic) cortex, insula, subthalamic nucleus, and hippocampus are examined.

show abstract

Section: Uncertainty Discountingmentioning

confidence: 85%

Neural systems implicated in delayed and probabilistic reinforcement

2006

View full text Add to dashboard Cite

show abstract

“…This preference reversal effect is one of the fundamental facts of animal impulsiveness. Similarly, several authors have compared randomly varying delays to fixed delays with the same mean duration (Mazur, 1989;Rachlin et al, 2000). In these experiments, animals show a preference for variable delays.…”

Section: Experiments 1-discussionmentioning

confidence: 99%

Effects of temporal clumping and payoff accumulation on impulsiveness and cooperation

Stephens¹,

McLinn²,

Stevens³

2006

Behavioural Processes

View full text Add to dashboard Cite

“…In the peanuts effect, increasing the magnitudes of the outcomes by a constant factor shifts preference to the smaller, more probable outcome from the larger, less probable outcome (Du, Green, & Myerson, 2002;Green, Myerson, & Ostaszewski, 1999;Markowitz, 1952;Myerson et al, 2003;Rachlin, Brown, & Cross, 2000). That is, decision makers are more willing to take risks for small stakes ("peanuts").…”

mentioning

confidence: 99%

Decision biases in intertemporal choice and choice under uncertainty: Testing a common account

Chapman

Weber

2006

Memory & Cognition

View full text Add to dashboard Cite

Some decisions involve uncertain outcomes. For example, selecting an entrée at a restaurant entails uncertainty about how delicious each menu option would be. Other decisions involve delayed outcomes. For example, initiating an exercise program entails a delay until the positive results of exercise are observed. Both decision making under uncertainty and intertemporal choice have been the topic of much research. In the present article, we analyze potential parallels between these two types of choices.Decision making under uncertainty can be characterized by risk preferences. A preference for a lottery over its expected value (EV) (e.g., preferring a 50% chance of $10 over $5 for sure) is considered risk seeking, whereas a preference for the expected value over the lottery (e.g., preferring the $5 for sure) is known as risk aversion. Intertemporal choice can be characterized by time preferences. A preference for a positive outcome now rather than for an equivalent outcome later (e.g., preferring $10 now to $10 in 1 month) is called a positive time preference, and the extent of the time preference can be quantified as a discount rate, or the percentage of increase in the magnitude of the payout needed to offset a delay. For example, a 20% monthly discount rate would mean that $10 now is equally preferable to $12 in 1 month (Frederick, Loewenstein, & O'Donoghue, 2003).There are apparent parallels between choice under uncertainty and intertemporal choice-that is, seemingly analogous phenomena that could be explained if risk preferences and time preferences are driven by common factors (see Green & Myerson, 2004). A number of researchers have suggested that time and delay are parallel (e.g., Keren & Roelofsma, 1995;Rachlin, Logue, Gibbon, & Frankel, 1986) or have analogous effects on choice (Chapman, 1997;Gafni & Torrance, 1984;Myerson, Green, Hanson, Holt, & Estle, 2003).The study of both choice under uncertainty and intertemporal choice has centered around the analysis of decision biases, or deviations from normative theory. Risky choice biases are deviations from expected utility theory (Neumann & Morgenstern, 1953). Intertemporal choice biases are deviations from discounted utility theory (Koopsman, 1960). Prelec and Loewenstein (1991;Loewenstein & Prelec, 1992) noted that some risky choice biases parallel intertemporal choice biases.The purpose of the present experiments was to provide an empirical test of a particular account of the apparent parallels between biases in risky choice and biases in intertemporal choice. That is, we tested the idea that biases in the two domains that appear similar are the result of the same underlying mechanism. We first will describe two pairs of biases; we then will present a psychophysical account for parallels between the biases and, finally, an empirical test devised to evaluate this account. Pairs of Parallel BiasesCommon difference and common ratio effects. The common difference effect is a bias in intertemporal choice in which adding a constant delay to both choice op- Two...

show abstract

Discounting in judgments of delay and probability

Cited by 82 publications

References 20 publications

Neural systems implicated in delayed and probabilistic reinforcement

Neural systems implicated in delayed and probabilistic reinforcement

Effects of temporal clumping and payoff accumulation on impulsiveness and cooperation

Decision biases in intertemporal choice and choice under uncertainty: Testing a common account

Contact Info

Product

Resources

About