Ambiguity Seeking in Payoffs as a Source of Consumer Patience

Consumers frequently face intertemporal choices where they must trade-off outcomes occurring at different points in time. These choices challenge consumers because they involve trading off smaller-sooner payoffs with larger-later payoffs, where future payoffs tend to be discounted. Researchers have investigated factors that mitigate impatience, such as connecting people to their future selves (Herschfield et al. 2011), framing the decision as expediting rather than deferring (Malkoc and Zauberman 2006), etc. The current study extends research on intertemporal choice by showing that adding ambiguity to larger-later payoffs increases the appeal of future options, thereby increasing patience. People generally prefer precise rather than ambiguous alternatives (Ellsberg 1961). Since people discount both the future and ambiguity, we might expect them discount future ambiguous payoffs especially severely. However, prior research reports instances in which congruity between an option’s various features improves appeal (e.g., Zhao and Xie 2011). Budescu and Wallsten (1995) propose a three-way taxonomy of the sources of imprecision that affect how individuals process and communicate uncertainty: the definition of the target event, the nature of uncertainty about that event, and the representation of this uncertainty. People are motivated to achieve congruity between the three factors, where congruity often increases an option’s appeal. Given that the future and ambiguity are both sources of uncertainty about the payoff, we predict: When ambiguity is added to larger-later payoffs, it will match the uncertainty of the future and thus improve evaluation of the target option. However, when ambiguity is added to smaller-sooner payoffs, it will have no such effect as it is incongruous with the present’s certainty.