The combined effects of risk and time on choice: Does uncertainty eliminate the immediacy effect? Does delay eliminate the certainty effect?

Researchers have noted parallels between decisions under uncertainty and over time. Three experiments evaluated the theory that uncertainty and time affect choice via a common underlying dimension, such that delaying an outcome is equivalent to making it uncertain. To test this account we asked whether adding uncertainty to outcomes would eliminate the immediacy effect bias. We also asked whether adding time delay to outcomes would eliminate the certainty effect bias. The answer to both questions was yes, provided the prospects were presented singly rather than jointly. In single evaluation uncertainly eliminated the immediacy effect and delay eliminated one form of the certainty effect, while in joint evaluation, these effects did not occur. These findings suggest that at least in some contexts decision makers may equate risk and delay. Other explanations are possible, however, demonstrating that the interaction between risk and delay is complex and not easily understood. (c) 2005 Elsevier Inc. All rights reserved.