Heterogeneity and parsimony in intertemporal choice

Michel Regenwetter, Daniel R. Cavagnaro, Anna Popova, Ying Guo, Chris Zwilling, Shiau Hong Lim, Jeffrey R. Stevens

Research output: Contribution to journalArticle

6 Scopus citations

Abstract

Behavioral theories of intertemporal choice involve many moving parts. Most descriptive theories model how time delays and rewards are perceived, compared, and/or combined into preferences or utilities. Most behavioral studies neglect to spell out how such constructs translate into heterogeneous observable choices. We consider several broad models of transitive intertemporal preference and combine these with several mathematically formal, yet very general, models of heterogeneity. We evaluate 20 probabilistic models of intertemporal choice using binary choice data from two large-scale experiments. Our analysis documents the interplay between heterogeneity and parsimony in accounting for empirical data: We find evidence for heterogeneity across individuals and across stimulus sets that can be accommodated with transitive models of varying complexity. We do not find systematic violations of transitivity in our data. Future work should continue to tackle the complex trade-off between parsimony and heterogeneity.

Original languageEnglish (US)
Pages (from-to)63-94
Number of pages32
JournalDecision
Volume5
Issue number2
DOIs
StatePublished - Apr 2018

Keywords

  • Heterogeneity
  • Intertemporal choice
  • Noise
  • Random preference
  • Transitivity of preferences

ASJC Scopus subject areas

  • Social Psychology
  • Neuropsychology and Physiological Psychology
  • Applied Psychology
  • Statistics, Probability and Uncertainty

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  • Cite this

    Regenwetter, M., Cavagnaro, D. R., Popova, A., Guo, Y., Zwilling, C., Lim, S. H., & Stevens, J. R. (2018). Heterogeneity and parsimony in intertemporal choice. Decision, 5(2), 63-94. https://doi.org/10.1037/dec0000069