I'm not surprised, and I'd even say I expected something like that to be uncovered after learning of the very common bias where people under-value the future, either compared to the present or incrementally for different intervals. One way to think about it is that in casual situations people seem to apply an excessively high depreciation, like *0.25 per year, when calculating the NPV of the offer.
My guess is that, in more serious and controlled situations the same people would apply a more reasonable depreciation, like *0.8 a year or better. It seems that the "small amount of money now" fixes this for the casual situation of the experiment. It's not clear to me if the monery really suppresses a bias (skewed valuation) or if it addresses a straightforward issue of trust that otherwise confounds the experiment. I would certainly doubt whether I'd see the 1-week or 1-year payments, and fifty-one weeks less of doubt is valuable.
Another possible confounding factor is the "closed world" formulation of the experiment. In a closed world, "broke now" is really bad but "money in my pocket" may be comfortable enough to allow me to wait for the better pay-off in a year. I might be broke again next week, but who cares.
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timeasmymeasure
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Date: 2009-02-04 09:11 pm (UTC)My guess is that, in more serious and controlled situations the same people would apply a more reasonable depreciation, like *0.8 a year or better. It seems that the "small amount of money now" fixes this for the casual situation of the experiment. It's not clear to me if the monery really suppresses a bias (skewed valuation) or if it addresses a straightforward issue of trust that otherwise confounds the experiment. I would certainly doubt whether I'd see the 1-week or 1-year payments, and fifty-one weeks less of doubt is valuable.
Another possible confounding factor is the "closed world" formulation of the experiment. In a closed world, "broke now" is really bad but "money in my pocket" may be comfortable enough to allow me to wait for the better pay-off in a year. I might be broke again next week, but who cares.