Psychology

Rationally Inattentive Intertemporal Choice

S. J. Gershman and R. Bhui

This innovative research by Samuel J. Gershman and Rahul Bhui challenges the conventional perspective of temporal discounting, revealing that it stems from internal uncertainty in value assessments of the future. The study leverages rational inattention principles to optimize mental effort allocation, offering fresh insights into intertemporal choices through extensive data analysis and experimental work.

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Abstract

This paper challenges the traditional view of temporal discounting as an intrinsic preference for immediate rewards. Instead, it proposes that discounting arises from internal uncertainty in value representations of future events, where noisy mental simulations are rationally combined with prior beliefs. The authors extend this idea by incorporating adaptive modulation of simulation noise based on task demands, using principles of rational inattention. They demonstrate how optimal allocation of mental effort can explain the magnitude effect in intertemporal choice, supported by re-analyses of existing datasets and a new experiment.

Publisher

Nature Communications

Published On

Jul 03, 2020

Authors

Samuel J. Gershman, Rahul Bhui