Level of impulsivity varies, but is present in everyone

Pecking the red light means waiting. Oh, how eight seconds can try a pigeon's patience. But then the chute opens and you're rewarded handsomely. Thirty pellets!

Which do you choose? Most of the time, the green light. For a pigeon, it seems, a bird in hand is worth at least five in the bush.

People, of course, aren't so different, and Washington University psychologist Leonard Green can prove it with his laboratory experiments on people, rats and pigeons. Green studies discounting: the tendency for all animals to take a smaller, sooner something rather than a larger something later.

"It's something fundamental to what it means to be a living creature," said Amy Odum, a Utah State University psychologist who also studies discounting. "We are very much creatures of the now and driven by immediate outcomes."

And so it will be no surprise if the Wilson family, winners of last week's Powerball jackpot, elect for a lump sum payout of $121 million rather than the full $254 million in an annuity. Of 43 Powerball jackpot winners from 2003 to 2005, 41 took the immediate payout.

"From an economic perspective, we behave irrationally," Odum said. The overall jackpot is what the cash payout earns at a compounded interest rate of 5 percent over 29 years. Some financial planners would say that, given inflation, a well-invested lump sum payout could outperform the annuity. But lottery officials say that the low risk and tax advantages of the annuity -- the state doesn't pay taxes and can therefore invest the entire principal -- make the annuity an overlooked option.

In contemporary culture, Green sees marketers competing to exploit our impulsivity or appeal to our self-control. It's a war between the payday loan shops and the human resources rep begging you to sign up for automatic 401(k) deductions; between the salesman offering you a no-money-down car right now, and the scientist telling you that global warming will be a really big deal for your grandchildren -- later.

"We have a bias toward the present," said Patrick McAlvanah, a Washington University economics graduate student who also works in Green's lab. "Don't ask people to save when they get their paycheck. You force them to save when they have their long-term interests in mind." ...

•	Level of impulsivity varies, but is present in everyone St. Louis Post-Dispatch, Saturday, Feb. 3, 2007 Byline: Eric Hand, ST. LOUIS POST-DISPATCH

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