Editing Time preference (section)

=== Experimental elicitation methods ===
There have been many attempts to measure a discount rate using experimental methods. Yet, there is still no consensus on the rate. This may be due to the varying elicitation methods for the studies themselves. Put another way, how a study asks questions to uncover the discount rate can influence the result itself.

The first experiments to measure discount rates were called MEL (money earlier or later) experiments, wherein participants were asked about their preferences between receiving a certain some of money now and a different sum of money later. Yet, measures of time preferences and inter-temporal tradeoffs came before this. One of the most famous examples is that of the marshmallow experiment. In this Mischel and Ebbesen told kids that they could have one marshmallow now, or, if they waited until the experimenter left and returned, they could have two.<ref>{{Cite journal |last1=Mischel |first1=Walter |last2=Ebbesen |first2=Ebbe B. |date=October 1970 |title=Attention in delay of gratification. |journal=Journal of Personality and Social Psychology |language=en |volume=16 |issue=2 |pages=329–337 |doi=10.1037/h0029815 |s2cid=53464175 |issn=1939-1315}}</ref>

The most common way to measure discount rates is as follows. Offered a choice of $100 today and $100 in one month, individuals will most likely choose the $100 now. However, should the question change to having $100 today, or $1,000 in one month, individuals will most likely choose the $1,000 in one month. The $100 can be conceptualized as a Smaller Sooner Reward (SSR), and the $1,000 can be conceptualized as a Larger Later Reward (LLR). Researchers who study temporal discounting are interested in the point in time in which an individual changes their preference for the SSR to the LLR, or vice versa. For example, although an individual may prefer $1,000 in one month over $100 now, they may switch their preference to the $100 if the delay to the $1,000 is increased to 60 months (5 years). This means that this person values $1,000, after a delay of 60 months, less than $100 now. The key is to find the point in time in which the individual values the LLR and the SSR as being equivalent. That is known as the ''indifference point''.<ref name="Odum2011" /> Preferences can be measured by asking people to make a series of choices between immediate and delayed payoffs, where the delay period and the payoff amounts are varied.