A New Method of Measuring Temporal Discounting: the Motivational Present Value of Future Rewards

Jane Ebert, University of Minnesota, USA
Drazen Prelec, Massachusetts Institute of Technology, USA
In behaviors motivated by future concerns, people often appear myopic, e.g., saving insufficiently for retirement. We suggest that conventional measures of present value, sometimes used to predict such behavior, provide a poor measure of the present motivational value of future rewards. In four experiments we develop and examine a measure of the motivational present value of future rewards, demonstrating that the present value obtained by conventional measures overestimates their motivational present value. Additional results suggest this overestimation may reflect how people assess rewards using a monetary scale, and is not due to the presence of effort in our motivational present value measure.
[ to cite ]:
Jane Ebert and Drazen Prelec (2007) ,"A New Method of Measuring Temporal Discounting: the Motivational Present Value of Future Rewards", in NA - Advances in Consumer Research Volume 34, eds. Gavan Fitzsimons and Vicki Morwitz, Duluth, MN : Association for Consumer Research, Pages: 653-660.