Loss of Self-Control in Intertemporal Choice May Be Attributable to Logarithmic Time-Perception

Abstract

Impulsivity and loss of self-control in drug-dependent patients have been associated with the manner in which they discount delayed rewards. Although drugs of abuse have been shown to modify perceived time duration, little is known regarding the relationship between impulsive decision-making in intertemporal choice and estimation of time-duration. In classical economic theory, it has been hypothesized that people discount future reward value exponentially. In exponential discounting, a temporal discounting rate is constant over time, which has been referred to as dynamic consistency. However, accumulating empirical evidence in biology, psychopharmacology, behavioral neuroscience, and neuroeconomics does not support the hypothesis. Rather, dynamically inconsistent manners of discounting delayed rewards, e.g., hyperbolic discounting, have been repeatedly observed in humans and non-human animals. In spite of recent advances in neuroimaging and neuropsychopharmacological study, the reason why humans and animals discount delayed rewards hyperbolically is unknown. In this study, we hypothesized that empirically-observed dynamical inconsistency in intertemporal choice may result from errors in the perception of time duration. It is proposed that perception of temporal duration following Weber’s law might explain the dynamical inconsistency. Possible future study directions for elucidating neural mechanisms underlying inconsistent intertemporal choice are discussed.

The original article first appeared in Medical Hypotheses 65(4):691–693, 2005. A newly written addendum has been added to this book chapter.

Addendum: Recent Developments

This addendum has been newly written for this book chapter.

Recent progress in studies on intertemporal choice witnessed a dramatic shift of research focus from the role of valuation (i.e., utility functions) to temporal cognition. Since Takahashi (2005) proposed that “hyperbolic” discounting (one of the most widely-known anomalies in intertemporal choice) may be attributable to nonlinear time perception during intertemporal decision making, much evidence which confirms the idea of the nonlinear time perception theory of hyperbolic discounting has accumulated (Takahashi et al. 2008; Zauberman et al. 2009; Han and Takahashi 2012). Notably, Han and Takahashi (2012) demonstrated that hyperbolicity (i.e., decreasing impatience) is better explained by nonlinearity of psychological time than concavity of utility functions, rejecting the well-known Loewenstein-Prelec theory (1992) of hyperbolic discounting.

In addition to hyperbolic discounting, other prominent anomalies in intertemporal choice may be explained by the psychophysical characteristics of psychological time (Takahashi and Han 2012), which is proposed as “tempospect” theory of intertemporal choice. For instance, the sign effect (i.e., gain is more rapidly time-discounted than loss) is due to gain-loss asymmetry in psychological time (i.e., psychological time in waiting delayed gain is longer than that in waiting delayed loss) (Takahashi and Han 2012). Other anomalies in intertemporal choice (e.g., delay-speed up asymmetry, magnitude effect, and domain effect) can also be accounted for by the characteristics of psychological time (the subjective time-interval during intertemporal decision making) (see Takahashi and Han 2012, for details).

Neurobiologically, dopamine D2 receptors, known to be associated with temporal cognition, strongly modulates temporal discounting (Kawamura et al. 2013a). This finding is consistent with our tempospect theory of intertemporal choice. Furthermore, FKBP5 gene (a “suicide gene”, related to glucocorticoid stress hormone receptor functioning) polymorphism was shown to modulate temporal discounting (Kawamura et al. 2013b). This is the first neurogenetic evidence of our neuroeconomic theory of suicide (Takahashi 2011).

In addition to anomalies in intertemporal choice, those in decision under risk may also be explained by the nonlinearity of psychological time in repeated gambles (Takahashi 2011; Takahashi et al. 2012). This theory was also confirmed by our recent experiment (Takahashi and Han 2013). Taken together, various anomalies in economic decision can be accounted for by psychophysical characteristics of psychological time.