Psychological mechanisms in the discounting of future events

People are impatient and they often undervalue or discount the future more than they should. We see this in our short-sighted behaviors which can have negative consequences in the long-term. Limited research has been done to understand the psychological mechanisms that underlie our valuations of tile future, and none has demonstrated online processing differences in the valuation of near and far future events. The present research uses three experiments to identify differences in the online psychological mechanisms used in the valuation of near and far future events. The three experiments use a new paradigm in which participants are presented with a series of near and far hypothetical positive future events to value. Experiment I looked for memory differences for these near and far future events. Experiments 2 and 3 examined the effect of restriction of cognitive resources on the valuation of the presented future events, using a time pressure manipulation and simultaneous task manipulation respectively. Experiment 1 showed no differences in memory for near and far future events. Experiment 2 showed that restriction of cognitive resources increased valuations for far future events, but had no effect on the valuations of near future events. Experiment 3 replicated this result. This finding suggests that valuations of near future events may be made using a simple heuristic, possibly affect-based, while the valuations of far future events are made using more substantive processing.