Generation, Representation and Valuation of Choice Alternatives: A Psychological Model of Resource Slack with Applications to Intertemporal Choice
To understand whether a person chooses a given alternative, one has to understand what is competing with that alternative given perceived resource constraint or its inverse, perceived slack. We provide a unified psychological account of people’s mental representation of the decision to be made when faced with a focal proposed action. We connect our resource-based account to economic and psychological research on opportunity cost consideration. We first analyze how people generate and represent the resource competition for a proposed action, as a function whether resource supply is perceived to be sufficient or insufficient. People may take the choice as given, as a “Yes/No” decision about the proposed action. They may also spontaneously reframe the decision as a “Which one?” choice between the proposed use and salient competition. They may creatively counter-propose “What about this?” in an attempt to say yes to some variant of the proposal and without forgoing the salient competition. We show evidence that the representation of the problem depends on perceptions the balance of recruited resource supply and recruited demand. We then explain how likelihood of agreeing to a proposed action is affected by active engagement in a competing action that alters the relative value of that competition and the proposed alternative use of the same resource and b) ambiguity in perceptions of available resource supply and demand. We extend these ideas to explain how the psychological representation of the competition and relative valuation of the focal action and of the competition changes when the proposed action is in the future. We conclude by using these general principles to explain judgment and decision-making phenomena that have heretofore not been seen as related, such as discounting of future outcomes, procrastination, the planning fallacy, and other intertemporal phenomena.