The role of memory in temporal discounting

A widely observed phenomenon in intertemporal choice is temporal discounting; people prefer to have rewards sooner rather than later, even if the delayed rewards are larger. Despite the universality of temporal discounting, people vary substantially in their temporal discounting rates, with some people being much more willing to wait for delayed rewards than others. What are the neurocognitive mechanisms underlying these individual differences? This chapter presents the field’s current understanding of the roles of major cognitive capacities (specifically: inhibitory control, episodic memory, and semantic memory) in determining temporal discounting rates. The chapter also argues that, whereas there are circumstances under which inhibitory control and episodic memory retrieval are deployed during intertemporal choice, semantic memory retrieval may actually be the key cognitive contributor to variability in intertemporal preferences. Inhibitory control is likely to be engaged during intertemporal choice when choices are especially difficult or high-stakes. Episodic retrieval is likely to be involved when people are cued to imagine the future before they make these choices. Neither of these processes appear to be necessary for future-oriented choice, however, and there is growing evidence that the structural integrity of the anterior temporal lobe – a hub for semantic memory – is associated with temporal discounting. More research is needed to test this theory and to understand the precise mechanism by which semantic memory supports future-oriented choice. Further research is also needed to test the generalizability of these conclusions to other kinds of intertemporal choices, such as those involving primary rewards, punishments, or temporal uncertainty.