Hyperbolic Discounting: Why we choose things for now even if a better long-term option exists
Idea to Value
JULY 3, 2023
Which would you prefer? Getting one dollar today, or three dollars tomorrow? According to research, individuals and companies often choose options that give them a small gain in the short term, when if they were to wait a bit longer they would receive more. This is due to a cognitive bias known as hyperbolic discounting. With hyperbolic discounting, people value something more if it were to happen immediately, and their value drops quickly if they were to have to wait a few days.
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