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Interval effects: superadditivity and subadditivity in intertemporal choice

Scholten, Marc and Read, Daniel (2004) Interval effects: superadditivity and subadditivity in intertemporal choice. Operational Research working papers, LSEOR 04.66. Department of Operational Research, London School of Economics and Political Science, London, UK. ISBN 0753016885

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Abstract

Time discounting is influenced both by the delay to outcomes, and by the interval separating them. In contrast to the effects of delay, interval effects have received relatively little research attention. Previous research has shown that for intervals of moderate length, the rate of discounting decreases as intervals get longer (subadditive discounting). In this paper we show that, in addition, for short intervals the rate of discounting increases as intervals get longer, implying a U-shaped relationship between discounting and interval length. Superadditive discounting is shown in two studies. In Experiment 1, we show that short intervals are more likely to give rise to superadditive than subadditive discounting. In Experiment 2, we show that discounting for short intervals is lower than that for intervals of moderate length, but that discounting for moderate-length intervals is greater than that for long ones. In the discussion we place these findings in a broader context.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/collections/operationalResear...
Additional Information: © 2004 London School of Economics and Political Science
Library of Congress subject classification: Q Science > QA Mathematics
Sets: Research centres and groups > Management Science Group
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: LSEOR 04.66
Date Deposited: 16 Feb 2009 10:11
URL: http://eprints.lse.ac.uk/22748/

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