Time and the Decision-Maker

Time has a profound effect on our decision-making. This chapter explores why we sometimes prefer small, immediate outcomes instead of waiting for more significant outcomes in the future. This preference is one aspect of impulsivity and reflects a relatively stable individual difference. We discuss the Marshmallow test as a test used to study delay of gratification in children and delay discounting as a test of impulsivity in adults. Choices involving delayed outcomes deviate from the normative (exponential) model of discounting, but other kinds of discounting can. We explore some consequences of intertemporal choice as a risk factor for poor health choices and a decision fallacy that affects governments.