Concepedia

Waiting Time and Decision Making: Is Time like Money?

France Leclerc, Bernd H. Schmitt, Laurette Dubé

Journal of Consumer Research · 1995 · 533 citations · 10 references

TL;DR

Time is a resource that consumers must allocate when purchasing and consuming goods and services. The study investigates whether consumers treat time like money and discusses time’s nonfungibility as an explanation for differences between time and money decisions. The authors employ prospect theory and mental accounting to examine time‑money equivalence and analyze time’s nonfungibility. Studies show that consumers’ valuation of time varies with context, that time‑loss decisions in deterministic settings follow prospect theory’s convex loss function, and that under risk people are risk‑averse toward time losses, unlike their risk‑seeking behavior with monetary losses.

Abstract

Time is a resource. As such, consumers have to make decisions regarding their use of time in the purchase and consumption of goods and services. Using prospect theory and mental accounting as theoretical frameworks, this article investigates whether consumers treat time like money when they make decisions. In a series of studies, we found that the value of consumers' time is not constant but depends on contextual characteristics of the decision situation. Our results also suggest that in deterministic situations, people make decisions involving time losses in a manner consistent with the convex loss function proposed by prospect theory. However, in decision making under conditions of risk, people seem to make risk-averse choices with respect to decisions in the domain of time in contrast to the risk-seeking behavior often found with respect to decisions involving losses of money. We discuss the nonfungibility of time as an explanation for the discrepancy between decisions involving time and those involving money.