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How time flies: Time perception and intertemporal choice

Author

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  • Chen, Xiu
  • Zhao, Xiaojian
Abstract
This paper identifies a potential gap between time preference and intertemporal choices such as time discounting tasks: The intertemporal choices could be partly driven by a biased perception of time and thus may not completely reveal actual time preference. To test this, we explore the causal relationship between time perception and intertemporal choices by conducting a laboratory experiment in which cognitive load is used as a stimulating instrument to induce differences in time perception. We establish that the perceived time lengths for subjects with high cognitive load are shorter than those with low cognitive load and that individuals who underestimate time appear more patient in their intertemporal choices. Mediation analyses show that time perception mediates a significant portion of cognitive load’s effect on intertemporal choices. Our study thus demonstrates that time preference identified by intertemporal choices might be confounded by potentially biased time perception, calling for improving suboptimal time-related economic decisions due to an individual’s misperception of how time flies.

Suggested Citation

  • Chen, Xiu & Zhao, Xiaojian, 2024. "How time flies: Time perception and intertemporal choice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    • Handle: RePEc:eee:soceco:v:109:y:2024:i:c:s2214804323001866
    DOI: 10.1016/j.socec.2023.102160
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    More about this item

    Keywords

    Time perception; Intertemporal choice; Time discounting; Cognitive load;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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