Discounting of Delayed and Probabilistic Losses of Different Amounts
Abstract
Previous research has shown that the value of a larger future reward is discounted less steeply than the value of a smaller future reward. The value of probabilistic reward has been shown to have either an opposite effect on discounting (when a smaller reward is not certain its value was discounted less steeply than the value of a larger reward) or no effect on the rate of discounting at all. The present article shows the results for delayed and probabilistic losses: The same hyperbola-like functions describe temporal and probabilistic discounting of both rewards and losses. In the case of losses, larger delayed amounts are discounted less steeply than smaller delayed amounts (as in the case of delayed rewards). No relationship was found between the amount of probabilistic losses and the rate of discounting of their value. In summary, the results show that the description of the discounting process and the effect of amount on the rate of discounting are basically the same in case of both rewards and losses.
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