Hyperbolic Discounting

Business / Psychology

"For instance, when I have agreed to wait for six days for online discounts to start, I don’t mind waiting for one more day. Well, if I can wait for six, goes the rationale, waiting for seven shouldn’t be a big deal! But when I am told that I can get something today instead of tomorrow, my temptation refuses to wait for another day.Scientists, as usual, have a name for this tendency – Hyperbolic Discounting. I am not going to explain the meaning of a hyperbolic function by drawing some fancy graphs. That’s beyond the scope of this post and my abilities. ‘Discounting is hyperbolic’ simply means a reward that is very close gets drastically more attractive. In other words, the closer a reward is, the higher our ‘emotional interest rate’ rises and the more we are willing to give up in exchange for it. I hope you understand that for most humans, including me and most probably you too, this behavioural quirk comes ingrained in the psyche. It’s the way nature has wired us, an outcome of evolutionary process. So don’t feel bad. " - Safal Niveshak.

Resource Datasbase

James Clear Mental Models Overview