Inferring Delay Discounting Factors from Public Observables: Applications in Risk Analysis and the Design of Adaptive Incentives
Original version
10.5220/0010663400003060Abstract
Decision-makers regularly need to make trade-offs between benefits in the present and the future. Smaller immediate rewards are often preferred over larger delayed rewards. The concept of delay discounting describes how rewards further in the future lose their value in comparison to immediate or more proximal rewards. Empirical evidence shows that people discount future rewards using a hyperbolic function, which gives rise to preference reversals as the delay between a decision and receipt of the reward increases. People show great differences in terms of their tendency to discount future benefits. The extent of discounting is characterized by each individuals’ discounting factor k. This study investigates the extent to which the discounting factor k can be inferred from publicly observable pieces of information (i.e. ownership of items, habits) linked to individuals. Data was collected from 331 respondents in an online questionnaire. The analyses show that 37% of the variance can be (More)