Cognitive Processes in Intertemporal Choice: From Information Acquisition to Market Outcomes
Dr. Eric J. Johnson
Tuesday, September 20, 2016, 01:00pm - 02:00pm
Columbia University, Business School and Center for the Decision Sciences
Many important decisions involve tradeoffs that play out over time – saving for retirement, losing weight, or protecting the natural environment – however little work has investigated how differences in cognitive processing affect these intertemporal choices. Much research in psychology and economics indicates that, on average, people discount future rewards, making them less attractive than lower-value rewards delivered sooner. I will discuss research that looks at the heuristics that people use to make these choices, and use our understanding of cognition to design interventions that can make the right people more patient. Applications will include consumer finance and retirement decisions.