Discounting of Hypothetical Monetary Outcomes that are Both Delayed and Probabilistic

Abstract

The value of an outcome is affected both by the delay until its receipt: delay discounting) and by the likelihood of its receipt: probability discounting). Despite being well described by the same hyperboloid function, delay and probability discounting involve fundamentally different processes, as represented by the opposite effect amount has on the degree to which delayed and probabilistic rewards are discounted. Most of the previous research has studied the discounting of delayed and of probabilistic rewards separately, with little research examining more complex situations in which the rewards are both delayed and probabilistic. In the present experiment, participants made choices between a smaller reward that was both immediate and certain and a larger reward that was both delayed, and probabilistic. To examine the effect of amount, two larger, delayed and probabilistic rewards were used. A hyperboloid function provided excellent fits of probability discounting data at each delay and comparatively poorer fits for delay discounting data at each probability. In addition, an effect of amount on degree of discounting was consistently observed for probability discounting at each delay, but not for delay discounting at each probability. A hyperboloid model in which delay and probability were combined multiplicatively provided a good fit for the combined data. The results suggest that the hyperboloid is a good descriptor of more complicated decision making and that probability may be more heavily weighted than delay in determining people’s choices.

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