Exchanging the liquidity hypothesis: Delay discounting of money and self-relevant non-money rewards

Abstract

Evidence that primary rewards (e.g., food and drugs of abuse) are discounted more than money is frequently attributed to money's high degree of liquidity, or exchangeability for many commodities. The present study provides some evidence against this liquidity hypothesis by contrasting delay discounting of monetary rewards (liquid) and non-monetary commodities (non-liquid) that are self-relevant and utility-matched. Ninety-seven (97) undergraduate students initially completed a conventional binary-choice delay discounting of money task. Participants returned one week later and completed a self-relevant commodity delay discounting task. Both conventional hypothesis testing and more-conservative tests of statistical equivalence revealed correspondence in rate of delay discounting of money and self-relevant commodities, and in one magnitude condition, less discounting for the latter. The present results indicate that liquidity of money cannot fully account for the lower rate of delay discounting compared to non-money rewards.

Delay discounting of different outcomes: Review and theory

“…There are at least two possible reasons why the delayed nonmonetary outcomes were discounted to a similar degree as money in Stuppy‐Sullivan et al (). One possible reason, which is not particularly interesting, is that the nonmonetary outcomes were discounted similarly to money simply because the worth of the outcomes was presented in the question itself (see paragraph above).…”

“…The Inconstancy of Desire hypothesis is closely related to what has come to be called the Liquidity Hypothesis (also called the Fungibility Hypothesis; see Holt et al, ; Stuppy‐Sullivan et al, ). According to this hypothesis, outcomes that cannot be exchanged for a variety of things are discounted more steeply than outcomes that can be exchanged.…”

“…Recently, however, Stuppy‐Sullivan et al () used “self‐relevant” outcomes to show that liquidity may not account for the difference between delay discounting for nonmonetary outcomes and money. After completing a delay discounting assessment for money (a modified version of the Monetary Choice Questionnaire; Kirby et al, ), participants specified exactly what they would use the smaller immediate and larger delayed amounts of money to purchase for each choice.…”

“…A second, more interesting, possible explanation for the difference in results is that prior studies have used outcomes which are subject to decreases in preference for those outcomes in the future, when they would actually be received, whereas Stuppy‐Sullivan et al () used self‐relevant future outcomes as specified by the participants. They also used delays that were relatively short (maximum of 160 days) compared to typical delay discounting assessments (e.g., maximum of 50 years; Rachlin et al, ), which does not allow as much time for decrease in future preference.…”

Delay discounting in the pigeon: In search of a magnitude effect

“…Specifically, rates of discounting are less steep for money compared to that of directly consumable rewards like beer, candy, and soda (Estle, Green, Myerson, & Holt, 2007). Further, the functions of fungibility and perishability have an effect on rates of discounting separately from reinforcer type (Holt, Glodowski, Smits-Seemann, & Tiry, 2016); though, fungibility may be further mediated by individual preference (Stuppy-Sullivan, Tormohlen, & Yi, 2016). Regardless, fungibility may play a role in producing the magnitude effect in humans-a factor that is difficult to study with nonhuman animals but perhaps possible via a token economy.…”