Czerlinski,J.
Gigerenzer,G.
Goldstein,D.G.

Multiattribute choice rules can be classified as being either alternative-based or attribute-based. Conventional accounts of intertemporal choice, hyperbolic and exponential discounting, assume alternative-based rules. One consequence of using these rules is that choices will be transitive, meaning that if a is preferred to b, and b is preferred to c, then a will be preferred to c. There have been many demonstrations of intransitivity in domains other than intertemporal choice, and in this paper we undertake to establish whether intransitive intertemporal choice can be explained by a stochastic specification of exponential discounting, or if we need to invoke an attribute-based choice process. In an experiment, we demonstrate that the pattern of intransitive responses is inconsistent with alternative-based choice. We argue that intransitive choices can best be explained by a version of Tversky's (1969) lexicographic-semiorder rule, in which choice is based on the amount of money when that amount exceeds a threshold, but on delay otherwise. Transitive choices, on the other hand, seem to be based on the rule that lsquoearlier is betterrsquo or else on a consistent rate of discount. Copyright © 2000 John Wiley & Sons, Ltd.

Czerlinski, J., Gigerenzer, G., & Goldstein, D. G. (1999). How good are simple heuristics? In G. Gigerenzer, P. M. Todd, & the ABC Research Group., Simple heuristics that make us smart (pp. 97-118). New York: Oxford University Press. (Full text)

Publication year	1999
Document type:	In book
Publication status:	Published
External URL:	http://library.mpib-berlin.mpg.de/ft/jc/JC_How_1999.pdf View
Categories:
Keywords:	exponential discountinghyperbolic discountingintertemporal choiceintransitivity