The Material - Experiential Asymmetry in Present Bias : Why Material Items Lead to Less Present Biased Preferences

Consumers spend their money to acquire both material products and experiences. While much can be said about differences between material and experiential purchase, little is known about consumers’ impatience towards such products. The authors propose that these items are different in terms of how willing consumers are towards delaying them, and also in how steeply this discounting declines over time (a.k.a., present bias or hyperbolic discounting). Five studies provide evidence that, compared to equivalent material purchases, when delaying an experiential purchase, consumers display higher discount rates that decline significantly faster over time. Finally, we demonstrate that this effect is driven by whether the utility is extracted over a single or multiple consumption episodes. As such, expanding experiences to be consumed over multiple episodes diminishes the asymmetry.