Rate of Temporal Discounting Decreases with Amount of Reward

The present, subjective value of a delayed reward is a decreasing function of the duration of the delay. This phenomenon is termed temporal discounting. To determine whether the amount of the reward influences the rate of temporal discounting, we had subjects choose between immediate and delayed hypothetical rewards of different amounts ($100, $2,000, $25,000, and $100,000 delayed rewards). As predicted by psychological models of the choice process, hyperbolic functions described the decrease in the subjective value of the delayed reward as the time until its receipt was increased (R2s from .86 to .99). Moreover, hyperbolic functions consistently provided more accurate descriptions of the data than did exponential functions predicted by an economic model of discounted utility. Rate of discounting decreased in a negatively accelerated fashion as the amount of the delayed reward increased, leveling off by approximately $25,000. These findings are interpreted in the context of different psychological models of choice, and implications for procedures to enhance self-control are discussed.