Time-dependent gambling: Odds now, money later.

Abstract

Four experiments investigated temporal changes in the influence of probability and payoffs on gambling. Using urn draws, the authors found in Experiment 1 that temporal distance increased the influence of payoffs and decreased the influence of probability on preferences. The authors found in Experiment 2 that in choosing among the more distant gambles, participants offered more reasons dealing with payoffs and fewer reasons dealing with probability. In Experiments 3 and 4, the authors extended the scope of these findings using a card game and a raffle. The results were interpreted in terms of a temporal construal process that highlights the desirability of outcomes in the distant future and the feasibility of attaining the outcomes in the near future.Anecdotal evidence and empirical research across the various behavioral sciences suggest that decisions regarding future events often depend on temporal distance from those events (see, e.g., Ainslie, 1975;Ainslie & Haslam, 1992;Loewenstein & Prelec, 1992;Read, Loewenstein, & Kalyanaraman, 1999;Schelling, 1984). A course of action that seems desirable in the distant future may seem undesirable in the near future and vice versa. As a result, people sometimes regret their decisions when they get closer in time to implementing their decisions. "It seemed like a good idea at the time" is a phrase that is often muttered when one faces the tedious consequences of a decision made long ago. For example, when one plans a ski vacation for a rare free weekend a few months down the line, the decision is made with thoughts of swooshing down powdery ski slopes and, perhaps, sipping hot cocoa at night in the lodge. However, on the morning of the trip, one may instead find him or herself bemoaning a 5-hr drive in the snow, the hassle of putting on all the equipment, and the long wait to buy a lift ticket. More generally, temporal changes in evaluation of events may have important implications for human decision making in a wide variety of situations. In the present article, we explore these implications in the context of gambling decisions. Temporal ConstrualConstrual level theory (CLT) proposes that temporal distance changes people's responses to future events by changing the way people mentally represent those events (Liberman & Trope, 1998;Trope & Liberman, 2000). According to CLT, people use more schematic (higher level) construals to represent information about more distant-future events. High-level construals are decontextualized representations that extract the gist from the available information. These construals consist of superordinate, general, and core features of events. Low-level construals are less schematic, more contextualized representations of information about events. These construals include subordinate, specific, and incidental features of events. Thus, higher level construals are likely to include superordinate rather than subordinate goals, general rather than specific categories, and underlying causes rather than surface manifestation. For example, a high-l...

The effect of delay on risk tolerance and probability weights

“…Finally, our results supported the third hypothesis that temporal distance makes probability weighting curves more linear (people are more sensitive to changes in probability). This result seems to be in line with the fi nding that temporal distance has an impact on people's feelings, with immediately available rewards evoking stronger emotions than rewards available in the future (Abdellaoui et al, 2011;Sagristano et al, 2002;Savadori & Mittone, 2015). One could therefore assume that people are more calm in their decision making when lotteries are more distant in time.…”

The Effect of Abstract and Concrete Thinking on Risk-Taking Behavior in Women and Men

“…Abstract thinking promotes sensitivity to desirability considerations (i.e., value of an end-state of an action: for instance, amount of money gained within a risky task), and concrete thinking promotes sensitivity to feasibility considerations (i.e., ease of achieving the end-state; Lermer et al, 2014;Raue, Streicher, Lermer, & Frey, 2015;Sagristano, Trope, & Liberman, 2002).…”

Pricing Risk and Ambiguity: The Effect of Perspective Taking

“…Valuations of uncertain prospect are usually elicited through pricing tasks (Birnbaum & Stegner, 1979;Sagristano, Trope, & Liberman, 2002;Simonsohn, 2009). Two methods, requiring the decision maker to take the seller or the buyer perspective, respectively, are the willingness-to-accept (WTA) and the willingness-topay (WTP) method.…”