Bidding on the future: Evidence against normative discounting of delayed rewards.

Normative economic models assume that delay-discounting rates for future rewards are independent of the amount of, and delay to, a reward. These assumptions were tested in 3 experiments in which participants were asked to bid their own money on delayed monetary rewards in a sealed, second-bid auction. In Experiments 1 and 2, participants made their bids without feedback about the bids of other participants. In Experiment 3, half of the participants received such feedback. In Experiments 2 and 3, participants adjusted their bids until they were indifferent between the bid and the delayed reward. Participants' bids violated both normative assumptions: Discounting rates decreased with increases in amount for 62 of 67 participants, and a function in which the rate decreases with increases in delay (hyperbolic) fit the bids better than did a normative function (exponential) for 59 of 67 participants. A future reward is typically worth less to us than the same