Comparing intertemporal decision-making models: Predictions and applications in lifespan through subjective time perception.

Abstract

Intertemporal decision-making is essential in daily life, requiring individuals to evaluate the value of investments over time. This study aimed to assess how well intertemporal choice models explain and predict decision-making behaviours, focusing on subjective time perception across the lifespan. Five models were compared: two basic models (hyperbolic and exponential discounting) and three based on psychophysical principles of time perception (Stevens' power law exponential, Weber-Fechner exponential and Stevens' power law hyperbolic discounting). Using three datasets, this study identified which model better describes delay discounting and measured each model's predictive accuracy through cross-validation across the lifespan. Findings revealed that Stevens' power law exponential and hyperbolic discounting models provided better fit and predictive capability, suggesting that time perception in intertemporal decision-making follows Stevens' power law. The two models were applied to participants aged 9-82 years, showing nonlinear variations in discounting rates and time perception parameters. In summary, Stevens' power law exponential and hyperbolic models, which account for nonlinear subjective perceptions of time, enhanced understanding of intertemporal choice behaviours, attributing age-related differences in delay discounting to variations in time perception, thus supporting theories regarding age-related changes in delay discounting across the lifespan.