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Many decisions in one’s daily life involve the discounting of delayed or probabilistic losses: Should we pay off our credit-card balance in full or incur interest; should we buy more collision and liability insurance or risk having to pay more in case of an accident? Despite its importance, however, discounting of losses is understudied, and few studies have focused on individual differences. The current study recruited 407 on-line participants through Amazon’s Mechanical Turk who completed three discounting questionnaires: delayed losses, probabilistic losses, and delayed gains. Magnitude effects were observed with delayed gains (i.e., larger delayed gains were discounted less steeply than smaller delayed gains), but there were no systematic effects of amount on the discounting of delayed losses or probabilistic losses. Almost all participants increasingly discounted the value of gains as the delay to their receipt increased. In contrast, although the majority of participants increasingly discounted the aversiveness of losses as the delay to the payment increased and as the probability of payment decreased, a number of participants showed different patterns of choice. More specifically, there was a subgroup of participants that discounted the aversiveness of losses substantially more when the payment would be required after a relatively short delay or with a high probability but discounted the aversiveness less as the delay to the payment increased or the probability of payment decreased. Another subgroup of participants didn’t discount the aversiveness of losses with delay or probability at all. When these individual differences in responding patterns were taken into account, differential relations between the choices of delayed gains, delayed losses, and probabilistic losses emerged. Taken together, the results show that people differ quantitatively in their discounting of delayed gains but differ qualitatively as well as quantitatively in their discounting of delayed and of probabilistic losses. These results suggest that the processes underlying the discounting of delayed gains, delayed losses, and probabilistic losses are different, and it is critical to consider individual differences in decision-making when studying loss discounting.
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