Why Perception of Long Term Outcomes Should Be Influenced First?

There are different types of psychological distance, each with interesting implications for decision making.
“Psychological distance is a subjective experience that something is close or far away from the self, here, and now. Psychological distance is thus egocentric: Its reference point is the self, here and now, and the different ways in which an object might be removed from that point – in time, space, social distance, and hypotheticality – constitute different distance dimensions.” [1]
Temporal distance as a type of psychological distance, and specifically when we are interested in decision making, refers to the subjective perception of the decision maker, of the distance between their current time and the time they predicted they will experience the outcomes of a decision.
This text is part of the series on decision governance. Decision Governance is concerned with how to improve the quality of decisions by changing the context, process, data, and tools (including AI) used to make decisions. Understanding decision governance empowers decision makers and decision stakeholders to improve how they make decisions with others. Start with “What is Decision Governance?” and find all texts on decision governance here.
If the decision maker thinks options have outcomes which will be observed in the distant future, then preferences over these options will be less variable (more stable) than preferences over options which have outcomes that will be observed sooner. This is because options with distant outcomes will be based on high-level construals, which are less variable as they are based on more abstract, less detailed information that is consequently less likely to change frequently, while options with immediate outcomes will be based on low-level construals, which are concrete and can change more easily.
If temporal distance does in fact matter when deciding, and there is evidence that it does [1,2], then does this matter for decision governance?
If we have a decision situation in which the decision will lead to both immediate and distant outcomes, then options with more attractive distant outcomes and less attractive immediate outcomes should be preferred, all else being equal, to those with less attractive distant outcomes and more attractive immediate outcomes.
If we want to influence preferences away from specific options, we should invest more effort to change high-level construal of their distant outcomes, rather than low-level construal of their immediate outcomes.
If we want to mitigate the impact of temporal distance, we may want to provide more concrete information about distant outcomes, and provide supporting information to increase the confidence in the prediction that these concrete outcomes will materialize. Richer information about distant outcomes should change how they are perceived, and how they relate to preferences, perhaps to the extent that they change preferences because of the additional detail.
We can introduce, through decision governance, steps in the decision process to document key abstract ideas that lead the decision maker to preferences over distant and immediate outcomes – this may involve principles, for example, that the decision maker considers important for the decision, and values they believe outcomes need to be aligned to. In the firm, some of this information that influences principles, values, and goals, will appear in documentation of strategy, long term plans, mission, and vision. This investigation of abstract ideas influencing choice can be done indirectly, by having steps where they may reveal preferences, or by eliciting them in a more direct way, such as by asking for explanations for preferences.
Temporal distance can be influenced by designing the decision process to have steps in which we need to derive decision criteria from principles that the decision maker needs to provide. In addition, to understand their perception of immediate outcomes, we can require them to collect themselves information about these outcomes – this would lead them to highlight what is salient to them, rather than what we may assume matters to them.
References and Further Reading
- Trope, Yaacov, and Nira Liberman. “Temporal construal.” Psychological review 110.3 (2003): 403.
- Trope, Yaacov, and Nira Liberman. “Temporal construal and time-dependent changes in preference.” Journal of personality and social psychology 79.6 (2000): 876.
Decision Governance
This text is part of the series on the design of decision governance. Other texts on the same topic are linked below. This list expands as I add more texts on decision governance.
- Introduction to Decision Governance
- Stakeholders of Decision Governance
- Foundations of Decision Governance
- How to Spot Decisions in the Wild?
- When Is It Useful to Reify Decisions?
- Decision Governance Is Interdisciplinary
- Individual Decision-Making: Common Models in Economics
- Group Decision-Making: Common Models in Economics
- Individual Decision-Making: Common Models in Psychology
- Group Decision-Making: Common Models in Organizational Theory
- Role of Explanations in the Design of Decision Governance
- Design of Decision Governance
- Design Parameters of Decision Governance
- Factors influencing how an individual selects and processes information in a decision situation, including which information the individual seeks and selects to use:
- Psychological factors, which are determined by the individual, including their reaction to other factors:
- Attention:
- Memory:
- Mood:
- Emotions:
- Commitment:
- Temporal Distance:
- Social Distance:
- Expectations
- Uncertainty
- Attitude:
- Values:
- Goals:
- Preferences:
- Competence
- Social factors, which are determined by relationships with others:
- Impressions of Others:
- Reputation:
- Social Hierarchies:
- Social Hierarchies: Why They Matter for Decision Governance
- Social Hierarchies: Benefits and Limitations in Decision Processes
- Social Hierarchies: How They Form and Change
- Power: Influence on Decision Making and Its Risks
- Power: Relationship to Psychological Factors in Decision Making
- Power: Sources of Legitimacy and Implications for Decision Authority
- Power: Stability and Destabilization of Legitimacy
- Power: What If High Decision Authority Is Combined With Low Power
- Power: How Can Low Power Decision Makers Be Credible?
- Social Learning:
- Psychological factors, which are determined by the individual, including their reaction to other factors:
- Factors influencing information the individual can gain access to in a decision situation, and the perception of possible actions the individual can take, and how they can perform these actions:
- Governance factors, which are rules applicable in the given decision situation:
- Incentives:
- Incentives: Components of Incentive Mechanisms
- Incentives: Example of a Common Incentive Mechanism
- Incentives: Building Out An Incentive Mechanism From Scratch
- Incentives: Negative Consequences of Incentive Mechanisms
- Crowding-Out Effect: The Wrong Incentives Erode the Right Motives
- Crowding-In Effect: The Right Incentives Amplify the Right Motives
- Rules
- Rules-in-use
- Rules-in-form
- Institutions
- Incentives:
- Technological factors, or tools which influence how information is represented and accessed, among others, and how communication can be done
- Environmental factors, or the physical environment, humans and other organisms that the individual must and can interact with
- Governance factors, which are rules applicable in the given decision situation:
- Factors influencing how an individual selects and processes information in a decision situation, including which information the individual seeks and selects to use:
- Change of Decision Governance
- Public Policy and Decision Governance:
- Compliance to Policies:
- Transformation of Decision Governance
- Mechanisms for the Change of Decision Governance