Discounting of delayed rewards across the life span: age differences in individual discounting functions

The present effort addressed both the issue of the generality of choice models and the issue of possible qualitative developmental change in temporal discounting by examining behavior at the individual level across the life span. Data from individual children, young adults, and older adults who participated in two previous studies were analyzed [Green, L., Fry, A.F., Myerson, J., 1994. Discounting of delayed rewards: a life-span comparison. Psychol. Sci. 5, 33-36; Green, L., Myerson, J., Lichtman, D., Rosen, S., Fry, A., 1996. Temporal discounting in choice between delayed rewards: the role of age and income. Psychol. Aging 11, 79-84]. At all ages, a hyperbola-like function originally proposed by Green et al. (1994) based on group data, provided the best description of individual discounting functions. Two developmental trends were observed. The rate at which individuals discounted the value of delayed rewards decreased with age, and there was a systematic change in the shape of the discounting function. Each of these trends was reflected in a separate parameter of the model. The fact that the same mathematical model described the behavior of individuals of different ages suggests that age and individual differences in the discounting of delayed rewards are primarily quantitative in nature and reflect variations on fundamentally similar choice processes.