many people want to save more and plan to save more, but when faced by temptations, they often incur high levels of debt, including high-interest credit card debt (Angeletos, Laibson, Repetto, Tobacman, and Weinberg, 2003; Bernheim, Skinner, and Weinberg, 2001; Caplin, 2003; Laibson, Repetto, and Tobacman, 1998). As people live longer, long-range planning becomes increasingly important, as does the ability to implement such plans.

Normative models of intertemporal choice (decisions between outcomes occurring at different points in time) assume that there are strong individual differences—that someone who is impulsive in one domain of behavior will also tend to be impulsive in other domains. Yet research shows that people are very inconsistent in their attitude toward the future, in some cases behaving as if present gratifications were all that mattered and in other cases appearing to care more about the future than the present. Indeed, it was research on intertemporal choice by the social psychologist Walter Mischel (1996) that first led him to recognize the importance of situational factors in human behavior, an insight that revolutionized social psychology for decades. Although Mischel emphasized the role played by cognitive self-control strategies in what he termed “delay of gratification”—in a wonderful example, that a child could successfully wait to get a chocolate bar instead of taking an immediately available marshmallow if she cognitively transformed the marshmallow into little white clouds—modern research has revealed a multiplicity of cognitive and motivational mechanisms, any one of which, alone, appears to be capable of producing radical variation in people’s weighting of present and future. Different mechanisms, or mixtures of mechanisms, are invoked in different situations, producing striking variability in people’s tradeoffs of immediate and delayed costs and benefits.

Different decision contexts, for example, evoke different “choice heuristics”—rules of thumb that people use to help them make decisions (Frederick, Loewenstein, and O’Donoghue, 2003). For example, when presented with a simple choice between two sequences, one improving (e.g., a mediocre restaurant dinner one weekend followed by a superb dinner the following weekend) and the other deteriorating (the same dinners but in reverse order), most people prefer the improving sequence. However, if asked to price the two sequences, most people value the declining sequence more highly, apparently because asking about money evokes considerations of net present value.

Emotions also play an important role in intertemporal decisions. There is considerable support for the idea that intertemporal decisions result from the interaction between two types of neural systems: “hot” affective systems that are inherently short-sighted and “cold” deliberative systems that are more even-handed when it comes to present and future (Loewenstein, 1996; McClure et al., 2004; Metcalfe and Mischel, 1999; Thaler and

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