Hyperbolic Discounting

Cognitive BiasDecision MakingBehavioral Economics

Hyperbolic Discounting explains why people prefer smaller, immediate rewards over larger, delayed ones.

Introduction

Hyperbolic Discounting explains why people prefer smaller, immediate rewards over larger, delayed ones.

Core Concepts

  1. Time Preference: Stronger preference for present benefits.
  2. Inconsistent Choices: Changing preferences over time.
  3. Self-Control: Strategies to resist impulsive decisions.

Applications

  • Personal finance for managing savings behavior.
  • Public health for encouraging delayed gratification.

Related Resources

  • Book: "Nudge" by Richard Thaler and Cass Sunstein.
  • Tools: Commitment devices like savings apps.

Related Topics

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