The effect of the past- and future self and past- and future awareness on intertemporal decision making
Consumers often make intertemporal choices; decisions that involve potential future pay-offs at different points in time. Potential future outcomes are not evaluated and considered properly which leads to decisions that in the future seem not as optimal as from an earlierpoint of view. People are hyperbolic discounters, meaning that when the time interval lies further ahead in the future, their discount rate for monetary gains in the future decreases. The sensitivity towards future time intervals can be influenced. People who are more aware of the future have lower personal discount rates. To what extent people discount the future when they are more nostalgic has been unknown, as well as to what level this nostalgia pronenessand its effect on discounting can be enhanced. During an experiment among 121 students of Erasmus University Rotterdam several manipulations were done to test these effects. The results showed that when a person is manipulated towards the future his personal discount rate decreases for monetary values in the far future. Higher awareness of the future in combination with priming the future through a manipulation leads to better discounting of monetary gainsfor the upcoming months. More nostalgic individuals have on average a higher discount rate when evaluating future values. Evidence was found that the level of nostalgia proneness could be enhanced through manipulation and therefore it does influence time discounting. Exceptthese few cases, further evidence that past manipulated groups discount future values different from the future manipulated group was not found. Further research still has to develop a manipulation to enhance nostalgia proneness and to see if there is any effect on time discounting. Therefore, and to improve on the manipulations this research used, further research could try other sorts of dependent variables and manipulations. The dependent variables should be more specific to a certain time interval, with the same starting- and enddate and across more different time intervals. The exact personal discount rate should be calculated to gain more precise results. Manipulations should be more specific to a certain individual and more specific to the certain time interval that is to be tested for time discounting.