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 the design of decision governance. Decision Governance refers to values, principles, practices designed to improve the quality of decisions. Find all texts on decision governance here, including “What is 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

1. Trope, Yaacov, and Nira Liberman. “Temporal construal.” Psychological review 110.3 (2003): 403.
2. Trope, Yaacov, and Nira Liberman. “Temporal construal and time-dependent changes in preference.” Journal of personality and social psychology 79.6 (2000): 876.