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The effect of income level
on the rate of discounting of delayed and probabilistic rewards
and punishment The discounting of delayed and probabilistic rewards is already a well studied phenomenon. On the other hand, the problem of discounting of delayed and probabilistic punishment was investigated sporadically. The present effort addresses two questions: (1) what is the function that describes best the discounting of delayed and probabilistic punishment; (2) what is the effect of the income level on the rate of discounting of delayed and probabilistic positive and negative outcomes. The results of two experiments show that: (1) the same hyperbola-like functions describe temporal and probabilistic discounting of both types of outcomes (hypothetical monetary gains and losses), at the group and individual levels; (2) delayed and probabilistic rewards, and delayed losses were discounted at different rates by adults of similar age but different income levels. Specifically, the lower income group showed a greater degree of temporal and probabilistic discounting of delayed and uncertain rewards, and a higher rate of temporal discounting of delayed losses than did the upper income group. The results of the experiments suggest that the effects of income on monetary decision-making are not specific to decisions involving future rewards, but are also seen in decision involving uncertain rewards, and future losses. Keywords: income, discounting, rewards, punishment, adult humans |
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