USING TEST OF INTRANSITIVITY TO COMPARE COMPETING STATIC AND DYNAMIC MODELS OF INTERTEMPORAL CHOICE

Abstract

Most traditional research on intertemporal choice assumes a deterministic, static, and alternative-wise perspective, leading to the widely adopted delay discounting paradigm. Recently, however, Dai and Busemeyer (2014) demonstrated that intertemporal choice is probabilistic, dynamic, and attribute-wise in nature, and they developed an attribute-wise diffusion model to account for these properties. This dissertation advances the previous research. Specifically, two new experiments with different types of intertemporal choice questions and an even more extensive comparison of competing static and dynamic models were conducted to further examine the relevant properties and look for a more comprehensive cognitive model of intertemporal choice. The results of the first experiment indicated that the probabilistic, dynamic, and attribute-wise nature of intertemporal choice was supported under both conditions when the SS options occurred immediately or were delayed options. In addition, the results of the second experiment indicated that most participants showed transitive intertemporal preferences in terms of weak stochastic transitivity. The extensive model comparison led to an overall best model which was a generalization of the diffusion model with direct differences as advocated in Dai and Busemeyer. This model can account for all the effects and phenomena examined in this dissertation, including the delay duration effect, the common difference effect (and its reversal), the magnitude effect, and the potential intransitivity of intertemporal choice, as well as the marginal and conditional relationships between choice proportions and response times observed in individual data as a demonstration of the dynamic nature of intertemporal choice. Furthermore, this model can be conveniently extended to intertemporal choice between losses and account for the relevant gain-loss asymmetry. Consequently, it is recommended as a replacement for the existing models of intertemporal choice which assume a deterministic, static, and alternative-wise perspective on the topic.