Intransitive intertemporal choice

Multiattribute choice rules can be classified as being either alternative-b ased or attribute-based. Conventional accounts of intertemporal choice, hyp erbolic and exponential discounting, assume alternative-based rules. One co nsequence of using these rules is that choices will be transitive, meaning that if a is preferred to b, and b is preferred to c, then a will be prefer red to c. There have been many demonstrations of intransitivity in-domains other than intertemporal choice, and in this paper we undertake to establis h whether intransitive intertemporal choice can be explained by a stochasti c specification of exponential discounting, or if we need to invoke an attr ibute-based choice process. In an experiment, we demonstrate that the patte rn of intransitive responses is inconsistent with alternative-based choice. We argue that intransitive choices can best be explained by a version of T versky's (1969) lexicographic-semiorder rule, in which choice is based on t he amount of money when that amount exceeds a threshold, but on delay other wise. Transitive choices, on the other hand, seem to be based on the rule t hat 'earlier is better' or else on a consistent rate of discount. Copyright (C) 2000 John Wiley & Sons, Ltd.