Contagion Effects in Intertemporal Decision Making.

Contagion Effects in Intertemporal Decision Making Michael T. Bixter (michael.bixter@stonybrook.edu) Department of Psychology Stony Brook, NY 11794 USA Elizabeth M. Trimber (elizabeth.trimber@stonybrook.edu) Department of Psychology Stony Brook, NY 11794 USA Christian C. Luhmann (christian.luhmann@stonybrook.edu) Department of Psychology Stony Brook, NY 11794 USA Abstract Prior research has provided substantial insight into individuals’ intertemporal preferences (i.e., preferences about delayed rewards). The present study instead investigated the preferences of small groups of individuals asked to express collective intertemporal decisions. The paradigm consisted of three phases. During the Pre- Collaboration and Post-Collaboration phases participants completed an intertemporal matching task individually. During the Collaboration phase participants completed a similar task in small groups, reaching mutually agreed-upon decisions. Results suggest that group preferences were systematically related to group members’ Pre-Collaboration preferences. In addition, collaborative decision making altered group members’ intertemporal preferences. Furthermore, it was found that individuals’ Post- Collaboration preferences were independently related to both their Pre-Collaboration preferences and the preferences of other group members, suggesting that individuals’ Post-Collaboration preferences represented a revision of their Pre-Collaboration preferences based on the preferences observed in other group members. Keywords: collaboration; intertemporal preferences People must often make choices between alternatives which have outcomes at different times in the future. For example, an individual may choose going to college instead of getting a job after high school, believing that a college degree will have greater benefits over the long-term. Such tradeoffs between time and reward are referred to as intertemporal choices. Within the literature on intertemporal choice, particular attention has been paid to the finding that decision makers tend to discount the value of delayed rewards (e.g., Myerson, Green, Hanson, Holt, & Estle, 2003; Rachlin, Raineri, & Cross, 1991). That is, the subjective value of a reward decreases as its delivery is increasingly delayed. Prior research has found that individual differences in intertemporal preferences are associated with consequential real-world behaviors, including scholastic achievement, credit-card debt, substance abuse, and income (for reviews, see Frederick, Loewenstein, & O’Donoghue, 2002; Luhmann, 2009). The majority of the research on intertemporal choice has focused on the preferences of individual decision makers. This emphasis is potentially problematic because many real- world intertemporal decisions are made by groups of two or more decision makers. For instance, a couple might jointly determine what portion of their discretionary income they want to allot for consumption and what portion they want to set aside for saving. Similarly, individuals faced with various short- and long-term investment options often discuss the costs and benefits in consultation with a financial advisor. Because past research has focused on the intertemporal preferences of individuals, little is known about how such collaborative decision making might influence intertemporal decisions. The current study was designed to provide insight into this important question. Collaborative Decision Making Though collaborative decision making has not been studied in the context of intertemporal decisions, there is a large literature on group decision making in other domains. Much of this research stems from the study of group polarization, which refers to the tendency of group members’ attitudes (e.g., attitudes towards capital punishment) to shift toward one extreme following group interaction and discussion (see Isenberg, 1986). The research done on group polarization has primarily focused on how decisions made by groups are systematically different from the decisions of the group’s individual members. Less attention has been devoted to exploring whether collaborative experiences carry over to influence the post-collaborative behavior of individuals. As others have noted (Schultze, Mojzisch, & Schulz-Hardt, 2012), this is problematic because the duration of many real-world collaboration experiences is often relatively brief when compared to the potential lifetime of decisions individuals will make after a collaborative experience ends. For instance, an individual may meet with a financial advisor to discuss various investment options, but the duration of this meeting will be much shorter compared to the many investment decisions the individual will go on to make following the meeting.