Resource Slack and Propensity to Discount Delayed Investments of Time Versus Money.

Zauberman, Gal; Lynch, John

doi:10.1037/0096-3445.134.1.23

Cited by 321 publications

(287 citation statements)

References 40 publications

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“…Recent findings by Zauberman and Lynch (2005) also demonstrate the complex effects of time distance on optimism. They showed that people were more optimistic regarding the availability of both time and money resources in the future (in a month) compared with the present (today).…”

Section: Discussionmentioning

confidence: 93%

Predicting the near and distant future.

Nussbaum¹,

Liberman²,

Trope³

2006

Journal of Experimental Psychology: General

138

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Four studies investigated individuals' confidence in predicting near future and distant future outcomes. Study 1 found that participants were more confident in theory-based predictions of psychological experiments when these experiments were expected to take place in the more distant future. Studies 2-4 examined participants' confidence in predicting their performance on near and distant future tests. These studies found that in predicting their more distant future performance, participants disregarded the format of the questions (e.g., multiple choice vs. open ended) and relied, instead, on their perceived general knowledge (e.g., history knowledge). Together, the present studies demonstrate that predictions of the more distant future are based on relatively abstract information. Individuals feel more confident in predicting the distant future than the near future when the predictions concern outcomes that are implied by relatively abstract information.Keywords: time distance, construal level theory (CLT), prediction, confidence, overconfidence Effective planning often requires predicting outcomes that are expected in the relatively distant future. For example, planning a vacation often requires predicting a long time in advance the weather conditions at the destination of the trip. Similarly, class registration requires predicting a long time in advance whether the selected courses would live up to one's expectations. The question then is whether and how temporal distance from future outcomes affects individuals' predictions about those outcomes. Does temporal distance affect the confidence with which predictions are made? Temporal distance from future outcomes ordinarily reduces the accuracy with which those outcomes can be predicted. Are individuals sensitive to these temporal differences in accuracy?There is a large amount of research on how individuals predict the future and the factors that influence those predictions (see, e.g., Griffin, Dunning, & Ross, 1990;Kahneman & Lovallo, 1991;Sherman, 1980;Wilson, Wheatley, Meyers, Gilbert, & Axsom, 2000). However, this research has typically compared predictions with actual outcomes. There is relatively little research on how temporal distance from future outcomes affects predictions about those outcomes. In an early study addressing this issue, Nisan (1972) asked participants to estimate their chances of correctly answering a random question from a test they expected to take on the same day or 4 weeks later. The results showed that greater temporal distance enhanced expectancy of success and risk-taking, particularly by individuals who were success rather than failure oriented. More recently, Gilovich, Medvec, and their colleagues (Gilovich, Kerr, & Medvec, 1993;Savitsky, Medvec, Charlton, & Gilovich, 1998) reported a series of studies showing that individuals had higher performance expectancies for distant future tasks as compared with near future tasks, a phenomenon they labeled "cold feet." For example, participants expected to perform better on a variety of...

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Section: Discussionmentioning

confidence: 93%

Predicting the near and distant future.

Nussbaum¹,

Liberman²,

Trope³

2006

Journal of Experimental Psychology: General

138

View full text Add to dashboard Cite

show abstract

“…Frederick et al (2002) provides a comprehensive review of the literature on intertemporal choice. Zauberman and Lynch (2005) show that decision makers discount time resources more than money. 22 These findings also address to a certain extent the concerns of Rubinstein (2003) over the psychological validity of hyperbolic discounting.…”

Section: Behavioral Regularitiesmentioning

confidence: 99%

Modeling the Psychology of Consumer and Firm Behavior with Behavioral Economics

Lim

Camerer

2006

Journal of Marketing Research

210

131

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“…This effect was accounted for by perceived resource constraint. Zauberman and Lynch (2005) demonstrated a similar pattern such that perceived abundance of resources led people to consider opportunity cost less while committing these resources for future tasks. Participants' perceived abundance of certain resources affected their temporal discounting of future investments of those resources.…”

Section: Resource Constraintsmentioning

confidence: 82%

Cultural differences in opportunity cost consideration

Zhang¹,

Ji²,

Li³

2014

PsycEXTRA Dataset

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Two studies were conducted to investigate cultural differences in opportunity cost consideration between Chinese and Euro-Canadians. Opportunity cost is defined as the cost of a benefit that must be forgone in order to pursue a better alternative (Becker et al., 1974). In both studies, participants read about hypothetical purchase scenarios, and then decided whether they would buy a certain product. Opportunity cost consideration was measured in two ways: (1) participants' thoughts pertaining to other (nonfocal) products while making decisions; (2) participants' decisions not to buy a focal product (Study 1) or a more expensive product (Study 2). Across both indexes, we found that after controlling for individual difference variables and amount of pocket money, Chinese participants in China considered financial opportunity cost more than Euro-Canadians in Study 1. Similar results were observed in Study 2 when comparing Chinese in Canada with Euro-Canadians However, the cultural effect on opportunity cost consideration was confounded by family income in Study 2. Implications for resource management, limitations of the current research and directions for future research are discussed.

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Resource Slack and Propensity to Discount Delayed Investments of Time Versus Money.

Cited by 321 publications

References 40 publications

Predicting the near and distant future.

Predicting the near and distant future.

Modeling the Psychology of Consumer and Firm Behavior with Behavioral Economics

Cultural differences in opportunity cost consideration

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