Sequence effects
Also known as: Preference for improving sequences
People want experiences to get better over time, even when that lowers the total.
What it means
Sequence effects are the systematic preferences people hold over the temporal profile of a series of outcomes, beyond the value of the outcomes themselves. Most strikingly, people prefer improving sequences — outcomes that rise over time — to declining ones, even when a declining sequence delivers the same or greater discounted total, which directly contradicts positive time discounting. The preference is driven by anticipation (savoring a better future), by adaptation, and by a desire to end on a high note, linking it to the peak-end rule. It implies that how value is distributed across time, not just how much there is, governs satisfaction with wages, vacations, and consumption plans. Sequence effects are a key piece of evidence that the discounted utility model misses important features of how people experience time.
Examples
Most workers prefer a salary that rises year over year to one that starts higher and falls, even when the falling path pays more in total.
Given seven nights, most people would rather start in the modest guesthouse and finish at the grand hotel than the reverse — the holiday ends high and remembers well.
Offered two recovery plans, a patient picks the one that gets steadily easier over the one that front-loads the good days, even though it takes a week longer.
First described in Loewenstein & Prelec (1993); Loewenstein & Sicherman (1991).