Time-Dependent Gambling: Odds Now, Money Later

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.

Intertemporal choice under timing risk: An experimental approach

This paper investigates how individuals evaluate delayed outcomes with risky realization times. Under the discounted expected utility (DEU) model, such evaluations depend only on intertemporal preferences. We obtain several testable hypotheses using the DEU model as a benchmark and test these hypotheses in three experiments. In general, our results show that the DEU model is a poor predictor of intertemporal choice behavior under timing risk. We found that individuals are averse to timing risk and that they evaluate timing lotteries in a rank-dependent fashion. The main driver of timing risk aversion is nothing but probabilistic risk aversion that stems from the nonlinear treatment of probabilities. Copyright Springer Science+Business Media, LLC 2007Intertemporal choice, Timing risk, Non-expected utility, C91, D81, D91,