Time and money are two valu­able and scarce re­sources that in­di­vid­u­als try to man­age op­ti­mally in their ev­ery­day de­ci­sions. But im­por­tant dif­fer­ences dis­tin­guish the two at­tributes. It turns out that peo­ple seem not to man­age their time like they man­age th

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Time and money are two valu­able and scarce re­sources that in­di­vid­u­als try to man­age op­ti­mally in their ev­ery­day de­ci­sions. But im­por­tant dif­fer­ences dis­tin­guish the two at­tributes. It turns out that peo­ple seem not to man­age their time like they man­age their money.

Most em­pir­i­cal stud­ies in de­ci­sion science fo­cus on choices in­volv­ing money. In con­trast, im­por­tant ev­ery­day de­ci­sions can also in­volve non-mon­e­tary at­tributes, such as time. Clas­si­cal eco­nomic mod­els usu­ally con­vert con­se­quences mea­sured in time units into their mon­e­tary equiv­a­lents, hence as­sum­ing that “time is money”. The as­sump­tion that peo­ple man­age their time like their money has, how­ever, not yet been in­ves­ti­gated em­pir­i­cally within the frame­work of ra­tio­nal choice mod­els. In a se­ries of ex­per­i­ments, we set out to do ex­actly that, ob­serv­ing how peo­ple make de­ci­sions in­volv­ing gains and losses of time and how these choices dif­fer from those in­volv­ing money. Their re­sults re­veal that, at least in the lab­o­ra­tory, sub­jects take rad­i­cally dif­fer­ent de­ci­sions when time is in­volved as com­pared to money.

The dif­fi­culty of eval­u­at­ing time

De­spite the old say­ing that “time is money,” sev­eral im­por­tant dif­fer­ences dis­tin­guish the two at­tributes. The main one is prob­a­bly fun­gi­bil­ity: un­like money, time can­not be stored or saved, and the value of time is highly con­text-de­pen­dent. While a loss of money can be com­pen­sated by a gain of money, the same is of­ten not true for time. Fur­ther­more, con­trar­ily to money, the value of time is not nec­es­sar­ily mono­tonic. Hav­ing more money is al­ways bet­ter, but the plea­sure of time ded­i­cated to an en­joy­able ac­tiv­ity can de­crease at some point. Given these char­ac­ter­is­tics, the per­cep­tion of time can give rise to para­dox­i­cal be­hav­iour. Past re­search has high­lighted that peo­ple tend to sys­tem­at­i­cally un­der­es­ti­mate the du­ra­tion of past episodes (du­ra­tion ne­glect), or the time needed to com­plete a given task (plan­ning fal­lacy). Mis­per­cep­tion of time can also lead to in­con­sis­tent be­hav­iour when peo­ple and or­ga­ni­za­tions de­cide about the fu­ture (dy­namic in­con­sis­tency).

Stan­dard­ised def­i­ni­tions of time

In a re­cent se­ries of lab­o­ra­tory ex­per­i­ments, we stud­ied how peo­ple make choices when pos­si­ble con­se­quences are ex­pressed in terms of gains and losses of time. Since the value of time can vary largely with the con­text, one of the chal­lenges of the project was to de­sign a stan­dard­ised defini­tion of time. This was achieved by the con­struc­tion of con­crete sce­nar­ios. In a first ex­per­i­ment, the time con­sid­ered was the num­ber of min­utes that sub­jects spent in the ex­per­i­ment. Losses and gains of time were de­fined as the pos­si­bil­ity to re­spec­tively in­crease or de­crease the du­ra­tion of the ex­per­i­ment (up to one hour) so that sub­jects could have to spend more or less time in the lab­o­ra­tory. Time thus re­ferred to the same con­text for all sub­jects and the gains and losses of time could be im­ple­mented for real (i.e., sub­jects could re­ally leave the ex­per­i­ment ear­lier than ex­pected, or spend more time than ex­pected on the ex­per­i­ment.) In an­other ex­per­i­ment, the sce­nario con­sisted of a job con­tract of two ses­sions of four hours each, at a sooner and a later pe­riod, for a given salary. Choices in­volved vari­a­tions of work­ing time. For in­stance, the ex­per­i­menters ob­served whether sub­jects pre­ferred to en­joy a 1-hour re­duc­tion of work­ing time at a sooner or later pe­riod. The ex­per­i­ments also in­volved sim­i­lar choices with mon­e­tary con­se­quences that were used as a base­line treat­ment (or bench­mark).

De­cid­ing about time ver­sus money

Re­sults show that sev­eral as­pects of de­ci­sions are sys­tem­at­i­cally dif­fer­ent be­tween time and money. One of them re­lates to risk-tak­ing. Sub­jects take fewer risks when de­cid­ing about losses of time than when de­cid­ing about losses of money. This may be be­cause losses of time are harder to com­pen­sate than losses of money. An­other striking dif­fer­ence re­lates to how peo­ple per­ceive fu­ture losses of time as com­pared to fu­ture losses of money. For money, ra­tio­nal­ity rec­om­mends de­lay­ing losses as far as pos­si­ble in the fu­ture. In re­gard to time, how­ever, most sub­jects are in­dif­fer­ent to post­pon­ing time losses. A siz­able share of sub­jects even ex­hibits a pref­er­ence for ex­pe­dit­ing such losses. While it stands in op­po­si­tion to fi­nan­cial ra­tio­nal­ity, such be­hav­iour is con­sis­tent with the pop­u­lar wis­dom: “never put off till to­mor­row what you can do to­day.” As for money, sub­jects take dif­fer­ent de­ci­sions whether con­se­quences are framed in terms of gains or losses. This so-called “fram­ing ef­fect” has been largely doc­u­mented for mon­e­tary choices, and is of­ten used in mar­ket­ing or pub­lic pol­icy as a way to in­flu­ence de­ci­sions. The re­searchers ob­served that asym­me­tries be­tween gains and losses at the ori­gin of the fram­ing ef­fect are more pro­nounced for time than for money. This sug­gests that fram­ing can be an ef­fi­cient tool to in­flu­ence the way peo­ple man­age their time.

The re­sults of­fer a bet­ter un­der­stand­ing of how peo­ple man­age their time. In par­tic­u­lar, they high­light par­tic­u­lar choice pat­terns that can be spe­cific to such de­ci­sions. For in­stance, this re­search shows a large het­ero­gene­ity in choices in­volv­ing time, sug­gest­ing that man­agers can ex­pect a large di­ver­sity of be­hav­iour in the way peo­ple or­ga­nize their time. It also shows that peo­ple are more vul­ner­a­ble to de­ci­sion bi­ases, such as pro­cras­ti­na­tion, when choices in­volve time. These find­ings can be used to de­velop man­age­ment strate­gies that aim at im­prov­ing time man­age­ment in de­ci­sion-mak­ing sit­u­a­tions


MOHAMMED ABDELLAOUI, Pro­fes­sor of De­ci­sion Science at HEC Paris and Di­rec­tor of Re­search at CNRS, and EM­MANUEL KEMEL, CNRS Re­search Pro­fes­sor and Af­fil­i­ate Pro­fes­sor at HEC Paris

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