ABSTRACT
This chapter covers the discussion of hindsight and projection biases, duration neglect and the peak-end effect and the notion of discount functions and the consequences for decision making when they cross. It explains the factors that influence discount rates. Hindsight and related self-serving biases often influence recollections of attitudes and can lead to distortions whereby people tend to be biased to take credit for favourable outcomes avoid blame for unfavourable ones. The chapter helps to consider some of the problems raised by these so called 'intertemporal' choice situations. Returning to the issue of temporal discounting, one important way to avoid the consequences of crossing discount functions and addictive behaviour is to make a commitment. In the context of time-based decisions, violations of the normative theory, the exponential discounting model are easy to find. This discussion of the effects of time on decision making brings us to the end of the chapters concerned with analysing and describing models of choice.
