Publication Type
Journal Article
Version
acceptedVersion
Publication Date
12-2023
Abstract
Inconsistency in consumer time preferences has been well established and used to explain seemingly short-sighted behaviors (e.g., failures of self-control). However, prior research has conflated time-inconsistent preferences (discount rates that vary over time) with present bias (greater discounting when outcomes are delayed specifically from the present, as opposed to from a future time). This research shows that time-inconsistent preferences are reliably observed only when choices are substantially delayed (e.g., months into the future), which cannot be explained by present bias. This seeming puzzle is explained by a novel cross-period discounting framework, which predicts that consumers are more impatient when choosing between options occurring in different subjective financial periods. As a result, they display inconsistent time preferences and are less willing to wait for an equally delayed outcome specifically when a common delay to both options moves the larger-later option into a subsequent financial period. Six studies and multiple supplementary studies demonstrate that sensitivity to subjective financial periods accounts for time-inconsistent consumer preferences better than current models of time discounting based on present bias.
Keywords
intertemporal choice, time discounting, categorization, mental accounting, budgeting, impulsivity, present bias
Discipline
Marketing | Sales and Merchandising
Research Areas
Marketing
Publication
Journal of Consumer Research
Volume
50
Issue
4
First Page
787
Last Page
809
ISSN
0093-5301
Identifier
10.1093/jcr/ucad029
Publisher
Oxford University Press
Citation
JANG, Minkwang and URMINSKY, Oleg.
Cross-period impatience: Subjective financial periods explain time-inconsistent choices. (2023). Journal of Consumer Research. 50, (4), 787-809.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7608
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1093/jcr/ucad029