The effect of pseudo‐immediacy on intertemporal choices

Abstract

An interesting phenomenon, which we dub the ‘pseudo‐immediacy effect’, was detected in intertemporal choices. The majority of our participants preferred the smaller but sooner (SS) outcome to the larger but later (LL) outcome when a pseudo‐immediacy reward was framed, but a higher proportion of participants preferred the LL outcome to the SS outcome when the pseudo‐immediate format was removed. Such a shift violated the invariance principle which requires that the preference order between options does not depend on the manner in which they are described. With reference to the pseudo‐certainty effect reported by Kahneman and Tversky in 1984, our findings typically support the notion that risk and delay are psychologically equivalent and that the same psychological process underlies risk and intertemporal choice.

Keywords:

• pseudo‐certainty effect
• pseudo‐immediacy effect
• intertemporal choices
• invariance principle

Acknowledgments

This research was partially supported by the Knowledge Innovation Project of the Chinese Academy of Sciences (No. KSCX2‐YW‐R‐130), the National Natural Science Foundation of China (No. 70632003; 70871110), and the Special Fund for Beijing Key Discipline Construction. The authors wish to thank Yan‐Ling Bi, Zhao Liu, Xiao‐Yu Zhao, and Zhe Liang for their supervision of the data collection, the anonymous referee for his or her helpful remarks and comments, as well as Timothy Conboy for his assistance with the expression of English. The paper has also benefited from discussions with Zhu‐Yuan Liang and Li‐Lin Rao.