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.

Keywords: Choice; Delay discounting; Exchangeability.

Figure 1

Inferential Confidence Intervals (ICI) for statistical difference between delay discount rate (lnk) for Money and Commodity at each magnitude. ICIs for the medium magnitude condition do not overlap, which indicates that Money DD and Commodity DD measures are different at the medium magnitude. ICIs for the large magnitude questionnaires do overlap, indicating that Money DD and Commodity DD measures are not different at the large magnitude.

Figure 2

Test for statistical equivalence between delay discount rate (lnk) for the large magnitude Money and Commodity assessments depicts the ICIs and their range (Rg, which is the difference between the upper limit of the higher mean and the lower limit of the lesser mean). Rg is within the Delta bar, indicating that discount rates are statistically equivalent.