January 20, 2022
By Duke University
This study evaluates how individuals process information to make personal finance decisions. The researchers assessed how study participants considered choices between a monetary amount that will be received today and a monetary amount to be received in the future. Utilizing eye-tracking technology, the researchers were able to study whether monetary amount and payment timing were considered together or separately, ultimately finding that most people making intertemporal decisions considered the information separately.
Findings revealed that participants who were more likely to choose options with larger rewards further in the future over receiving smaller rewards today tend to place more weight on information about reward amounts than on time information. By contrast, participants who were more likely to choose options with smaller rewards today tended to place more weight on information about time. The research provides implications for how heuristics and choice architecture may be further studied in the context of personal finance decision making.
This NEFE-funded research resulted in the following published journal article: Amasino, D.R., Sullivan, N.J., Kranton, R.E., & Huettel, S.A. (2019). Amount and time exert independent influences on intertemporal choice. Nature Human Behavior, 3, 383–392. https://doi.org/10.1038/s41562-019-0537-2