Time is on my side: Optimism in intertemporal choice

The present research examines the role of optimism on time preferences for both losses and gains. It is argued that optimism has asymmetric effects on time preferences for gains versus losses: one reason why decision makers p refer immediate gains is because they are optimistic that these gains will be followed by additional gains in future. In contrast, decision makers pre fer to delay losses because they are optimistic that losses are avoidable i n the future. Optimism about outcomes affects time preferences for both gai ns and losses, such that low optimism reduces the discount rates while incr eased optimism is associated with higher discount rates. This prediction wa s supported in two different domains: monetary outcomes (Study 1), and heal th (Study 2). Implications of these results for both research practice and time preferences in the real world are discussed. (C) 2001 Elsevier Science B.V, All rights reserved.