Tendency for people to prefer the smaller immediate reward in favor of a larger delayed reward.
Frederick, S., Loewenstein, G., & O'Donoghue, T. (2002). Time Discounting and Time Preference: A Critical Review. Journal of Economic Literature, 40(2), 351–401.
The task is adapted from Frederick (2005). For each item, participants indicate the strength of their preference for either a smaller amount of money now or a larger amount of money later (e.g., "I prefer $3400 this month or $3800 next month"). In each case the delayed larger amount corresponds to a substantial percentage increase in value, which on a simple interest basis would result in value increases of between 40% to 240% if earned annually. Participants indicated their preferences using a 6-point scale ranging from 1 (e.g., "I strongly prefer $3400 this month") to 6 (e.g., "I strongly prefer $3800 next month").
1. Do you prefer $3400 this month or $3800 next month?
I strongly prefer $3400 this month
I slightly prefer $3400 this month
I prefer $3400 this month
I prefer $3800 next month
I slightly prefer $3800 next month
I strongly prefer $3800 next month
2. Do you prefer $100 now or $140 next year?
3. Do you prefer $100 now or $1100 in 10 years?
4. Do you prefer $9 now or $100 in 10 years?
5. Do you prefer $40 immediately or $1000 in 10 years?
The temporal discounting score is the sum of the responses to the five items.
Toplak, M. E., West, R. F., & Stanovich, K. E. (2014). Assessing miserly information processing: An expansion of the Cognitive Reflection Test. Thinking & Reasoning, 20(2), 147–168.
See also: Stanovich, K. E., West, R. F., & Toplak, M. E. (2016). The rationality quotient: Toward a test of rational thinking. Cambridge, MA, USA: MIT Press.