The amount effect and marginal value

Area of Science:

• Behavioral Economics
• Decision Science
• Neuroeconomics

Background:

• Delay discounting describes how reward value decreases with time.
• The 'amount effect' suggests larger rewards are discounted less steeply than smaller ones.
• Previous research primarily used choice experiments to study delay discounting.

Purpose of the Study:

• To empirically obtain value functions for both immediate and delayed rewards using direct judgment.
• To investigate whether the amount effect in delay discounting is observable through direct value judgments.
• To determine if value functions differ based on reward delay.

Main Methods:

• Direct judgment tasks were employed to assess the subjective value of immediate and delayed rewards.
• Participants provided value ratings for various reward amounts presented at different delays.
• Value functions were constructed based on these direct judgments.

Main Results:

• Value functions for delayed rewards were found to be steeper than those for immediate rewards.
• This steeper discounting of delayed rewards demonstrates the amount effect.
• Direct judgment methods successfully revealed differences in value functions across delays.

Conclusions:

• The amount effect in delay discounting is empirically supported by direct value judgments.
• Value functions are demonstrably steeper for delayed rewards compared to immediate ones.
• This finding unifies the understanding of the amount effect and delay-dependent value perception.