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So you suck at delayed gratification? Can’t consistently invest your savings for the big pay off for when you retire? Or perhaps you’re ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Illum mallem levares, quo optimum atque humanissimum virum, Cn. Ut nemo dubitet, eorum omnia officia quo spectare, quid sequi, quid fugere debeant? Minime vero, inquit ille, consentit. Duo Reges: constructio interrete. Idem iste, inquam, de voluptate quid sentit? Ita relinquet duas, de quibus etiam atque etiam consideret. Ut in geometria, prima si dederis, danda sunt omnia. Sed id ne cogitari quidem potest quale sit, ut non repugnet ipsum sibi. Age sane, inquam. Nam illud quidem adduci vix possum, ut ea, quae senserit ille, tibi non vera videantur. Non minor, inquit, voluptas percipitur ex vilissimis rebus quam ex pretiosissimis. Nihil enim hoc differt.
An me, inquam, nisi te audire vellem, censes haec dicturum fuisse? Dic in quovis conventu te omnia facere, ne doleas. Hoc non est positum in nostra actione. His singulis copiose responderi solet, sed quae perspicua sunt longa esse non debent. Atque ab his initiis profecti omnium virtutum et originem et progressionem persecuti sunt. Idem iste, inquam, de voluptate quid sentit?
Quasi vero, inquit, perpetua oratio rhetorum solum, non etiam philosophorum sit. Quid ad utilitatem tantae pecuniae? Videsne quam sit magna dissensio? Qui bonum omne in virtute ponit, is potest dicere perfici beatam vitam perfectione virtutis; Nam ista vestra: Si gravis, brevis; Quamquam ab iis philosophiam et omnes ingenuas disciplinas habemus; Oculorum, inquit Plato, est in nobis sensus acerrimus, quibus sapientiam non cernimus. Sed quanta sit alias, nunc tantum possitne esse tanta.
- For decisions, use slow thinking to interrupt your bias.
Organise processes or teams to interrupt ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Quid ergo attinet gloriose loqui, nisi constanter loquare? Nec lapathi suavitatem acupenseri Galloni Laelius anteponebat, sed suavitatem ipsam neglegebat; Negat esse eam, inquit, propter se expetendam. In his igitur partibus duabus nihil erat, quod Zeno commutare gestiret. Sed fortuna fortis; Duo Reges: constructio interrete. Quodsi ipsam honestatem undique pertectam atque absolutam.
Aliter enim explicari, quod quaeritur, non potest. Virtutis, magnitudinis animi, patientiae, fortitudinis fomentis dolor mitigari solet. Tecum optime, deinde etiam cum mediocri amico. Beatus autem esse in maximarum rerum timore nemo potest. Ad eas enim res ab Epicuro praecepta dantur. Atqui haec patefactio quasi rerum opertarum, cum quid quidque sit aperitur, definitio est. Qua tu etiam inprudens utebare non numquam. Deinde prima illa, quae in congressu solemus: Quid tu, inquit, huc? Vitiosum est enim in dividendo partem in genere numerare.
Non est ista, inquam, Piso, magna dissensio. Ergo omni animali illud, quod appetiti positum est in eo, quod naturae est accommodatum. Incommoda autem et commoda-ita enim estmata et dustmata appello-communia esse voluerunt, paria noluerunt. Neminem videbis ita laudatum, ut artifex callidus comparandarum voluptatum diceretur. Quod praeceptum quia maius erat, quam ut ab homine videretur, idcirco assignatum est deo. Quod praeceptum quia maius erat, quam ut ab homine videretur, idcirco assignatum est deo. Dempta enim aeternitate nihilo beatior Iuppiter quam Epicurus;
Some criticise the evidence behind Hyperbolic Discounting as, similar to so many behavioural science research, largely relying on university students as they are a cheap and available group of test subjects. Such critics argue that more experienced and older people consider longer views and criteria for their decision making, though this has not been proven through research yet.
Other criticisms do not undermine the observed behaviour behind Hyperbolic Discounting — of people choosing instant gratification — rather the reasoning behind it. So, for example, some point to the role of cravings, arousal and emotions in people seeking immediate rewards — though again, in my view this is relatively academic as the end result remains the same.
$100 versus $120.
Hyperbolic discounting is perhaps best known for the $100 versus $120 experiment. Participants in this experiment were offered a choice between receiving $100 today versus $120 in a week. Most people would choose the $100 immediately. Then they were offered the choice between $100 in a year versus $120 in a year and a week. From a rational perspective, these questions are identical — yet when adding the ‘year’, most people chose to take the $120 option.
Climate change.
This one’s a bit opinionated perhaps, but is it really? It is now pretty clear that climate change is a massive threat to humanity — there, I said it. Yet humans are reticent to act. Compare that to how most governments invested in dealing with the threat of covid when it was having clear immediate impacts. The immediate threat gets the attention, the distant one can be all too easily ignored.
Hyperbolic discounting is a core model in behavioural economics and has countless implications.
Use the following examples of connected and complementary models to weave hyperbolic discounting into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
Connected models:
- Fast and slow thinking: the model that explains the broader backdrop of heuristics and behavioural economics.
- Loss aversion: another fundamental and intrinsically linked model
Complementary models:
- Habit loop: particularly B.J. Foggs idea of ‘tiny habits’ or immediate rewards.
- Systems versus goals: in establishing the routine over relying on a distant goal.
- Divide and conquer: in respect to breaking down large projects.
- Cialdini’s six principles of persuasion: particularly in terms of freemium and quick value in relation to reciprocity.
Hyperbolic discounting was built on the work of Richard Hernstein who developed a ‘matching law’ before coining the term ‘hyperbolic discounting’ in a 1961 paper.
My Notes
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