Changes in time preference may simply be induced by changes in time perception

Present-biased behavior is traditionally studied using models of diminishing utility and varying rates of discounting the future. Recent efforts to curtail time inconsistencies of delay discounting have incorporated subjective time perception into the normative discount function. However, the ramifications of subjective time on inter-temporal choices have not been clearly examined. We simulate time-consistent exponential and time-inconsistent hyperbolic discounting behavior with subjective time to see how the psychological scaling of objective clock time affects people's choice of the delayed reward. Our results suggest that time contraction and dilation respectively increase and decrease the probability of choosing the later outcome. We also find that these time perception-based preference shifts are similar in effect size to preference shifts typically explained by changes in discount rates earlier in the literature. Our results suggest that a psychological time-perception account can be used to explain observed present-biased behaviors instead of relying on traditional discount-rate explanations.