Cultural Neuroeconomics of Intertemporal Choice



In social psychology literature, the ”temporal construal” theory has been
proposed for explaining time-inconsistency in discounting behavior (Trope &
Liberman, 2003). This theory claims that temporal horizons change people’s
responses to future events by changing the manner they psychologically repre-
sent those future events. More specifically, people may form more abstract rep-
resentations (”high-level construals”) of distant-future events than near-future
events. High-level construals consist of decontextualized and central features
(”content” in terms of cultural neuroscience) that convey the essence of infor-
mation about future events (e.g., the type and size of a delayed reward), while
low-level construals include more contextual and peripheral details (”context”
in terms of cultural neuroscience). Hence, a sub ject with narrow attention allo-
cation (i.e., primarily paying her/his attention to either ”content” or ”context”)
may experience preference reversal in decision over time (e.g., procrastination
of formerly planned actions), whereas a subject with wide attention allocation
(i.e., paying attention to both ”content” and ”context”) may not change her/his
preference in decision over time.

Taken together, these behavioral economic and social psychological theories
and findings hypothesize that narrower allocation of attention may be associated
with more impulsive and inconsistent temporal discounting. With respect to cul-
tural differences in temporal discounting, we propose that Westerners are more
impulsive and inconsistent in inter-temporal choice behavior in comparison to
Easterners, for cultural neuroscience studies have demonstrated that Westerners
have more analytic attention allocation than Easterners. This prediction is also
supported by psychophysical accounts of hyperbolic and subadditive discount-
ing, as stated above (i.e., association between ”analytic”, rather than ”holistic”,
attention allocation and hyperbolic/subadditive discounting).

5 Cultural differences in temporal discounting
behavior

In order to examine the cultural differences in temporal discounting, we com-
pared intertemporal choices for monetary gains and losses by American and
Japanese subjects, by utilizing the q-exponential discount model based on Tsal-
lis’ statistics. For discounting behavioral data by Americans, we analyzed Estle
et al’s raw data obtained from students (N =27) at Washington University (Es-
tle et al., 2006). Japanese sub jects were students at the University of Tokyo
and Hokkaido University (N =21).

In order to avoid the magnitude effect on temporal discounting (i.e., small re-
wards are more rapidly discounted than large ones), we compared time-discounting
behavior for gains and losses of 100 dollars and 10,000 yen (about 100 US dol-
lars) between American and Japanese subjects. Our experimental procedure
was exactly the same as in our previous study (Takahashi, Ikeda, & Hasegawa,
2007; also see Appendix B for experimental details). In order to parameterize
impulsivity and inconsistency in intertemporal choices, we employed k
q and q
parameters in the q-exponential discount model (equation (1)). We fitted the q-
exponential function to the behavioral data by utilizing a non-linear least square
algorithm implemented in R statistical computing software (The R Pro ject for



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