Research finds patience helps better financial decisions
The U.S. is a culture that dislikes waiting. Recent research conducted by the behavioral science and marketing department at the University of Chicago’s Booth School of Business has shown that waiting might make people more patient and help them make better financial decisions.
Experiments involving patience usually consist of offering a smaller reward sooner and a larger reward later. Typically, studies show that subjects will make the choice of instant gratification, even if they would be financially better off by waiting. Things tend to be valued more in the present than in the future. However, this new research shows that making people wait can increase patience and make the reward seem more valuable.
To test this hypothesis, researchers conducted a series of experiments. Participants were offered a $50 prize sooner or a $55 prize later.
There were three groups of participants that each had to wait different lengths of time to receive their prize. The first group had to wait three days or 23 days. The second and third groups had to wait 30 days or 50 days. Participants had to wait in order to make a decision about which prize they would receive.
If participants waited for the lesser amount of time, they received $50. If they waited longer, they received $55. In the first group, only 31 percent of participants chose to wait for the larger reward. In the second group, that number rose to 56 percent. In the third group, which had to wait the longest to make a decision, the number jumped to 86 percent.
Information gathered from Sciencedaily.com.