Discounting of monetary rewards that are both delayed and probabilistic: delay and probability combine multiplicatively, not additively.

The value of an outcome is affected both by the delay until its receipt (delay discounting) and by the likelihood of its receipt (probability discounting). Despite being well-described by the same hyperboloid function, delay and probability discounting involve fundamentally different processes, as revealed, for example, by the differential effects of reward amount. Previous research has focused on the discounting of delayed and probabilistic rewards separately, with little research examining more complex situations in which rewards are both delayed and probabilistic. In 2 experiments, participants made choices between smaller rewards that were both immediate and certain and larger rewards that were both delayed and probabilistic. Analyses revealed significant interactions between delay and probability factors inconsistent with an additive model. In contrast, a hyperboloid discounting model in which delay and probability were combined multiplicatively provided an excellent fit to the data. These results suggest that the hyperboloid is a good descriptor of decision making in complicated monetary choice situations like those people encounter in everyday life.