Does Time Equal Money? Temporal Discounting and Self-Control: Insight into the Rationality of Personal Financial Decision-Making
Degree Granting Department
Paul Spector, Ph.D.
Mark Taylor, Ph.D.
Mauricio Palmeira, Ph.D.
Danielle Clark, DBA
Hyperbolic Discount, Self-Regulation, Impulsivity, Nudge Theory, Neuroeconomics, Behavioral Finance
Exponential and hyperbolic intertemporal choice models have been widely investigated to measure an individual’s degree of impulsivity in behavioral economics. Hyperbolic discounting research identifies subject’s disproportionately high subjective value to immediate rewards, to the extent that it is not in their best interest. Furthermore, preference reversals have shown subjective value demonstrates an inversely relationship proportional to delay.
Investigation into whether visual representations influence conservative personal finance savings behavior was demonstrated in this study by presenting a multitude of visualizations before allocation of limited monetary resources. Evaluation of the neighbor effect was tested to determine whether comparing individuals to their peers within their geographic region influenced future financial savings behavior. The significance of the research extends opportunities to proactively address the poverty rates among retired individuals through a series of nudging exercises, utilizing the neighbor effect.
As individuals make a lifetime worth of monetary tradeoff choices, deciding to consume less now with the intention to save more for the future is a critical thinking and decision-making process that translates practically when considering how people will save for retirement rather than utilize their funds immediately. This expression of one’s subjective value of time preference was assessed numerically and represented mathematically demonstrated by temporal discounting exercises. The following experiment sought to provides recommendations to encourage conservative personal finance savings behavior that’s in U.S citizen’s long-term financial best interest.
Scholar Commons Citation
Epstein, Joshua, "Does Time Equal Money? Temporal Discounting and Self-Control: Insight into the Rationality of Personal Financial Decision-Making" (2022). USF Tampa Graduate Theses and Dissertations.