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Hyperbolic Discounting

Article #182 • Written by Alan Bellows

"Eat, drink and be merry, for tomorrow we may die." It's an appealing philosophy to some, but for an average person in the modern world, on any given day the utterer is roughly 26,000 times more likely to be wrong than right about tomorrow's survivability. More often than not, one must answer for all reckless consumption and merriment; yet most of us continue to make choices which are detrimental to our futures.

Almost everyone occasionally falls victim to this defect of human reasoning, an irrational bias referred to as temporal myopia. Like visual myopia, temporal myopia causes clarity to decrease with distance, but it applies to our perception of the future rather than of our sense of sight. Instead of inspiring caution, our brains' typical response to this uncertainty is to sharply reduce the importance of the future in our decision-making, an effect known as hyperbolic discounting. Consequences which occur at a later time, good or bad, tend to have a lot less bearing on our choices the more distantly they fall in the future... even when one's life is at stake.

For instance, the eating-drinking-merriment philosophy may sound like that of a warrior before battle, but hundreds of thousands of heart patients embrace that strategy daily, and against the better advice of their doctors. According to Dr. Edward Miller, the dean of the medical school and CEO of the hospital at Johns Hopkins University, over half a million people undergo coronary-artery bypass graft surgery every year in the US, and of those only about ten percent make the necessary lifestyle changes to prevent future surgeries, chest pains, and premature death. About ninety percent of those patients decide to forego survival and comfort in favor of the short-term pleasures of unhealthy foods and laziness.

This irrational affliction is ubiquitous in humanity, though most of the time the risks are not so immediate as death. Consider the oft-used example of monetary rewards. If someone were to offer you the choice between $50 right now or $100 tomorrow, the latter would seem the clear choice. But as the delay gap widens, the importance of the extra $50 quickly diminishes for most people, despite the fact that its actual value is constant. For instance, confronted with a choice between $50 today or $100 one year from now, would you still wait for the $100? Statistically speaking, the vast majority will take the $50. But the pattern follows a hyperbola, so once a certain time threshold is crossed, the devaluing effect of time diminishes; for example, most will opt to take $100 in ten years over $50 in nine years.

In essence, hyperbolic discounting is the human tendency to prefer smaller payoffs now over larger payoffs later, which leads one to largely disregard the future when it requires sacrifices in the present. Being mortal creatures with limited lifespans and resources, the human survival instinct has evolved to appreciate that one cannot enjoy a conserved resource tomorrow if one doesn't survive today. This hard-wired tendency may be the bias behind our temporal short-sightedness, causing many people to make decisions which lead to short-term happiness and long-term disaster.

It turns out that hyperbolic discounting is the same logical flaw that causes people to over-commit their future schedules; Research has found that most people will make commitments long in advance that they would never make if the commitment required immediate action. The same defective reasoning causes people to underestimate the future consequences of drug use, unhealthy diets, procrastination, unprotected sex, infidelity... basically anything that's any fun at all.

Financial institutions such as banks and credit card companies build their businesses on hyperbolic discounting, because borrowing money and paying interest are actions which spend future resources for benefit in the present. In a society where credit is available to almost anyone, hyperbolic discounting has created an environment where it's rare for people to save up for expensive items, even when interest rates are so high that the amount paid is much greater.

This undervaluation of the future is not rational, yet almost everyone is subject to it to some degree. Fortunately, understanding the psychology of hyperbolic discounting can help one to avoid its detrimental effects. Because one's self-centered biases are at the heart of the problem, the best approach is to take an objective view of any decision that has future consequences. Some suggest that when you are confronted with such a choice, you should imagine that the decision belongs to someone else-- perhaps a close friend-- and that you have been asked for advice. Removing oneself from consideration makes one less blind to the future consequences, but taking rational actions based on on that new insight can still be harder than nailing Jell-o to a tree; being aware of the consequences doesn't mean that they are assigned the appropriate importance. Seeking a truly objective view from a trusted individual often provides the most practical input.

The spongy matter housed within the human skull is certainly extraordinary, but it's an imperfect machine. There are many tasks for which the human brain is ably suited, but clearly it can be surprisingly bad at planning for the future. And often we fail to learn from such mistakes, which is why most people have more than one regret. Of course our mortality urges us to consider the now over the later, so sometimes the possibility of one's death plays an important role in decision-making. But as medicine advances and lifespans increase, it will be interesting to see what becomes of temporal myopia. Perhaps over time our minds will evolve to truly appreciate that it is important to seize the day, but not at the expense of tomorrow.

Editor's Note: This article originally used Alcoholics Anonymous (AA) as an example of third-party support; but further investigation showed that AA is not a well-designed program, hence it made a poor example.

Article written by Alan Bellows, published on 13 May 2006. Alan is the founder/designer/head writer/managing editor of Damn Interesting.

Article design and artwork by Alan Bellows.
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64 Comments
APA7HY
Posted 13 May 2006 at 10:27 pm

Interesting read. The idea that we should live recklessly for we may die tomorrow seems like an oxymoron. Living recklessly will increase the chance that we will die tomorrow. Also, the idea of living however one chooses justified by the fact that they may die tomorrow is a bit hedonistic and irrational. Yes, you might die tomorrow. At any one point in time, you can die from any number of things.

Sometimes the ignornace of humanity is so stupid that it's brilliant.


mercuryswitch
Posted 13 May 2006 at 10:58 pm

I can totally see how the example with money works. In our world, it's all about the instant gratification, and many times without regard for the future. This is what leads kids to do drugs, procrastinate, party, play games, to the extent that it'll interfear with their studies, or lives. It seems that we're here to just have a blast, because you never know when the day comes that you'll drop dead.

I also agree with trying to look at your decisions in an objective point of view, as if you were trying to advise a friend on what to do. Just simply thinking of the problem like that will lead you to another decision.


cornerpocket
Posted 13 May 2006 at 11:07 pm

I wonder at the delayed payoff and how certain the recipient is of the giver. Take the money now when you see it, or let the guy with the money come back tomorrow, or next week, or next year?? It would depend a lot on whether you trust that individual to pay up, whether you feel you can count on circumstances to not change, whether you even expect to be around yourself to collect. Leaving such variables out of the supposed decision-making process may sell people short.


Cori
Posted 13 May 2006 at 11:27 pm

So very true. I'm glad I'm not alone, at least. ;)

That said, I'm not that awful. But this is probably the main reason that all of my diets slowly die off.


Prince
Posted 14 May 2006 at 12:07 am

People should live recklessly today but not recklessly enough to create a disaster tommorow. Or something like that.


Dustin Barbour
Posted 14 May 2006 at 03:06 am

It's not about living recklessly and without regard to the future. The saying "Eat, drink and be merry, for tomorrow we may die" means a little more to me. Ignore the frustrating things in life. In all reality, the things that happen to us here on Earth are so miniscule and, ultimately, insignificant that one shouldn't worry about the things that one cannot control. Let those things slide off of your back and go about being happy.

Things such as changing your diet and lifestyle for the sake of staving off a second heart attack (or a first for that matter) is completely rational and not against the ever-so-popular saying this post is built around... at least for me. Your mileage may vary.


NuTT98
Posted 14 May 2006 at 04:25 am

Blue Hippo anyone?

Get this $500 computer for only $49.95 for 32 weeks!

WOW, ok!


Korgmeister
Posted 14 May 2006 at 06:40 am

Actually the dieting thing may be an example of over-committing in the future.

As a rule of thumb, it's a bad idea to embark upon a diet/exercise regieme unless you felt comfortable with the idea of starting it right now. If you think "I shall diet this way!...starting tomorrow" then you've gone too ambitious.

Part of doing things in a prudent manner is being willing to do them slowly in order to do them properly. It means being willing to delay achieving the goal (the payoff, if you will) in order to increase the chances of it actually happening.

Too many people want to lose weight in 5 months, but it's the people who take 5 years to do it who will be able to keep it off.

And on that note, it's time for me to go on my daily constitutional.


Eric6654
Posted 14 May 2006 at 06:43 am

Good read, but i'm surprised you didn't mention 2 things:

1) The consequences for the environment due to this kind of thinking.

2) Research that links intelligence with the ability to plan for the future and delay gratification for a bigger reward (learned that in Psych 101).


another viewpoint
Posted 14 May 2006 at 06:47 am

"Eat, drink and be merry, for tomorrow we may die."

Wasn't this quote originally made by some soldier the night before he and his troops were to go to battle? Wouldn't that skew the hyperbolic discounting theory since when going to war, there would already be an increased (say 50/50) chance of survival? I would think there's a major difference between putting yourself in a life or death situation vs accidental death...in particular, when determining if you should accept a monetary bet.

(note...see also previous DI article regarding Risk).


Xiphias
Posted 14 May 2006 at 07:33 am

Assuming I live to be 80 then going by the events in my past I'll see two world wars, a couple of great despressions, large changes in lifestyles and lots of life changing inventions.

Si vis pacem, para bellum


Korgmeister
Posted 14 May 2006 at 07:49 am

I think the last two are pretty much a given. Let's just hope that nanotechnology features. Aww yeah!


Chris
Posted 14 May 2006 at 07:56 am

I agree with Cornerpocket. Maybe the follow through and the end result is there. The degree of risk or certainty has to be a factor. We hear stories of folks whom have invested all of their lives into something, only to lose that investment. They may be the exception to the norm, but it doesn't stop skepticism. Then again, one can succeed on one part and be unable to enjoy the benefits because of other factors. E.g.--made lots of money but became ill and was unable to do the enjoyable things planned with the money. Decisions, decisions.......


kimota
Posted 14 May 2006 at 08:05 am

One problem with the money example that's probably worth noting: because of inflation there's a break-even point where that future $100 only has the purchasing power of today's $50, and later on, even less. But the point is otherwise sound!


hkelly
Posted 14 May 2006 at 08:18 am

I seem to remember the correct quote as " Eat drink and be merry, for tomorrow we SHALL die"
A small change but a huge difference in meaning.
I can't find a reference .
(Another misquote, or rather misspeak, "A small step for A man, a giant step for mankind". The original quote has never made any sense to me, because of the left-out "A"....Gotta watch those little words)


Spike
Posted 14 May 2006 at 08:54 am

Great article and food for thought. I remember a nun in first grade telling me that it was okay to make mistakes as long as you learned from them, a very freeing thought that went unappreciated until I was older. We have become a society that believes why put off until tomorrow what you can have today. It's scary when you think of the future implications, if you do at all. It explains why so many people are buried in debt and the rain forest is disappearing. Very thought provoking....


joe schmoe
Posted 14 May 2006 at 09:42 am

Eric6654 said: "Good read, but i'm surprised you didn't mention 2 things:


1) The consequences for the environment due to this kind of thinking.

Or in other words, Eric6654 wants to know where the link to global warming is in your story. I must say I was a little bit disappointed as well.


el_calico_loco
Posted 14 May 2006 at 10:33 am

Though it undoubtedly has an effect on most people, temporal myopia isn't always the cause of self-destructive behavior. For example: my health is important to me, but it's not the only thing that's important to me. Pleasure is important as well. I'll sacrifice a few years of old age for pleasure - because I'd rather have fifty years of fun than one hundred years of boredom. :)

Said heart patients may just not Want to stop eating fried foods and ice cream, health consequences be damned. So be it; it's their bodies.

And, as a previous poster mentioned, the monetary example is flawed. There's something in economics called "present value" - the $50 may very well be worth more than the $100 when interest rates and inflation are taken into account. But replace that with Real Dollars, including interest, and the point becomes valid.


middlenamefrank
Posted 14 May 2006 at 12:10 pm

This argument is so oversimplified I can't stand it. Let's extend the question slightly. If someone offered you $50 right this second, $100 tomorrow, or $1 million in one hundred years, which makes the most sense? First, any human can completely eliminate the most 'valuable' option...we have no chance of collecting anything in 100 years unless we're a very young child at present, and even if we did, at 100+ years of age we have very little chance to enjoy the reward. So the best choice is to take the $100 tomorrow, right? By any measure that's worth considerably more than $50 today...or IS it? Let's say that you're an indigent in a third world country, with six kids who are literally on the edge of starvation and might not make it to see the $100 tomorrow. $50 today is without question more valuable to you than $100 even in 24 hours.

EVERY decision we make is subjective, and EVERYTHING of value is relative. The first vehicle I owned was a motorcycle, and I've owned one ever since. I've spent a considerable amount of money on them over the years, and would undoubtedly be wealthier now if I hadn't done that. But riding a motorcycle is one of my greatest pleasures in life, and my life has been considerably richer because I've spent (invested!) the money to enjoy that experience on a daily basis. Retiring a bit richer because I never spent any money on motorcycles wouldn't bring me NEARLY the same reward as spending a bit of my resources on the experiences I've had while I've been young enough to enjoy them.

On the other hand, I've been to lots of parties where people were doing drugs, and on every occasion I've declined to do drugs myself. (Okay, NEARLY every occasion!) The momentary thrill isn't worth the longterm price of killing my brain cells. Then again I have no qualms about an occasional drink, which also has been proven to kill brain cells. Is that hypocritical or is it just where I've decided to draw the line? You evaluate the risks with every decision, and you picks your poison.

We could all maximize our lifespans by leading lives of pure asceticism, never enjoying an occasional greasy cheeseburger. We could retire wealthy by never spending a single dime beyond the absolute bare essentials. We could eliminate the risk of STD's by never having sex, or greatly eliminate the risks by never having 'unprotected' sex. But we could never have children that way. At what point is it 'safe enough' to experience the joy of having children, or even just experience the pleasure of 'unprotected' sex with a monogamous partner?

Every day we make decisions like this. Keep in mind that life WILL kill you someday, your only choices in the matter relate to when it will happen and how much joy you'll experience along the way.


EVERYTHINGZEN
Posted 14 May 2006 at 03:00 pm

I seem to remember my father telling me some ten years ago "This ain't a dress rehearsal sweetie. Make the most of it". And also that age old "The only guarantee you have in life is that someday, you will die."

So for me, whilst I sit here and eat some fattening chips WITH dip and drink my cherry coke and when I step outside to smoke my marlboro, I will know that temporal myopia has won. I will be 100% certain that my id beats the ego without fail damn near every single time and, really, I will be okay with this. Different strokes for different folks, carpe diem and all that jazz...You really never know when your number is up, why deny yourself the things that make life good?


ballaerina
Posted 14 May 2006 at 04:56 pm

"The same defective reasoning causes people to underestimate the future consequences of drug use, unhealthy diets, procrastination, unprotected sex, infidelity… basically anything that's any fun at all. "

Tee hee.


Brian Carnell
Posted 14 May 2006 at 09:32 pm

This quote is pretty much the crux of the problem with this article:

"For instance, the eating-drinking-merriment philosophy may sound like that of a warrior before battle, but hundreds of thousands of heart patients embrace that strategy daily, and against the better advice of their doctors. According to Dr. Edward Miller, the dean of the medical school and CEO of the hospital at Johns Hopkins University, over half a million people undergo coronary-artery bypass graft surgery every year in the US, and of those only about ten percent make the necessary lifestyle changes to prevent future surgeries, chest pains, and premature death. About ninety percent of those patients decide to forego survival and comfort in favor of the short-term pleasures of unhealthy foods and laziness."

This is simply a complicated way of saying that since patients don't adopt the values that their physicians want them to adopt, that this means they are excessively discounting the future.

But the amount I discount the future is largely going to be based on my own values which are not universally shared nor objectively evaluated. I love twinkies. I love twinkies so much that even if I had a serious heart condition, I may choose to continue eating twinkies because the psychological pleasure they bring me outweights the possibility that keeping eating them will likely end my life earlier.

The response from the article seems to be that this valuation is not rational which, frankly, seems bizarre unless you've come up with a solution to thousands of years of debate about ethics, morality and the purpose/meaning of life.


winjer
Posted 14 May 2006 at 11:50 pm

Surely this is just like Net Present Value, a common accounting principle. That uses a projected interest rate to determine what something in the future is worth to you right now. The further away it is, the less it is worth. We seem to use a large 'interest rate', but that doesn't make it wrong.

Just because we (well all us in the "west") happen to have lived through the most stable 50 years in the history of humanity doesn't mean that our assessment of risk in the future is incorrect. In fact in some ways the high current rate of change surely renders the future sufficiently impredictable that it might be quite sensible to ignore predictions beyond a certain planning horizon?


MaddMan
Posted 15 May 2006 at 01:20 am

another viewpoint said: ""Eat, drink and be merry, for tomorrow we may die."

Wasn't this quote originally made by some soldier the night before he and his troops were to go to battle? Wouldn't that skew the hyperbolic discounting theory since when going to war, there would already be an increased (say 50/50) chance of survival? I would think there's a major difference between putting yourself in a life or death situation vs accidental death…in particular, when determining if you should accept a monetary bet.

(note…see also previous DI article regarding Risk)."

Che Guevera, I believe.


HunterKiller_
Posted 15 May 2006 at 02:13 am

mercuryswitch said:" It seems that we're here to just have a blast, because you never know when the day comes that you'll drop dead."

Amen to that.


GMan
Posted 15 May 2006 at 03:29 am

another viewpoint said: ""Eat, drink and be merry, for tomorrow we may die." /

The quote is from the bible if I'm not mistaken. 1 Corinthians 15:32


Furnace
Posted 15 May 2006 at 03:57 am

...drug use, unhealthy diets, procrastination, unprotected sex, infidelity… basically anything that's any fun at all.

I'm ashamed to be human, when a sentence like this stereotypes everyone as finding these acts "fun."


1c3d0g
Posted 15 May 2006 at 05:38 am

Furnace: agreed. It may have been considered "fun" for the author though, but don't put us all in the same basket, please... :-/


Brian Carnell
Posted 15 May 2006 at 06:32 am

The article here essentially says hyperboloic discounting is a logical flaw and irrational, but the Wikipedia article on the phenomenon does a much better job of describing it without these pejoratives,

For instance, when offered the choice between $50 now and $100 a year from now, most people will choose the immediate $50. However, given the choice between $50 in five years or $100 in six years most people will choose $100 in six years. In addition, given the choice between $50 today or $100 tomorrow, most people will choose $100 tomorrow.

Notice that whether discounting future gains is logically correct or not, and at what rate such gains should be discounted, depends greatly on circumstances. Many examples exist in the financial world, for example, where it is logically reasonable to assume that there is an implicit risk that the reward will not be available at the future date, and furthermore that this risk increases with time. Consider: Paying $50 dollars for your dinner today or delaying payment for sixty years but paying $100,000. In this case the restaurateur would be reasonable to discount the promised future value as there is significant risk that it might not be paid (possibly due to your death, his death, etc).

In order to explain the hyperbolic discounting phenomenon, it was hypothesized that the discount function with regards to time is shaped like a hyperbola. In other words, people will "discount" in order to get the payoff sooner (over short horizons) at a higher rate, but at a relatively low rate over long horizons.

At the extreme ends, I think most of us would agree. The drug addict who prefers the extreme immediate gratification of a hit of a crack pipe is excessively discounting the future. The miser who lives in filth although he has millions in the bank is not discounting the future enough. But other than those drastic examples, it's hard to see where a given person's preferences and risk assessment are anything but subjective differences. One person gets heart disease and goes vegan, exercises and prolongs his life. Another person sees eating steak and leisure as inherently a part of his day-to-day life and doesn't live quite as long. To simply say that one is logical while the other was irrational seems to me to miss a very important point about individual preferences and the subjectivity of valuation.

For example, I work out three times a week. I would be in much better shape if I worked out 5 days a week rather than wasting my time doing whatever I do those other two days of the week. Am I irrationally discounting my future? I think not.


Xiphias
Posted 15 May 2006 at 07:13 am

winjer said: "the most stable 50 years in the history of humanity"

Interesting statement, what makes the last fifty years the most stable?


Xiphias
Posted 15 May 2006 at 07:13 am

winjer said: "the most stable 50 years in the history of humanity"

Interesting statement, what makes the last fifty years the most stable?


James F
Posted 15 May 2006 at 08:19 am

Phineas Gage


kysportsfan
Posted 15 May 2006 at 08:33 am

(Another misquote, or rather misspeak, "A small step for A man, a giant step for mankind". The original quote has never made any sense to me, because of the left-out "A"….Gotta watch those little words)"

He actually did say the "A" but static or whatever in the transmission sounded like he did not say "A"

It just goes to show that we as humans want everything immediately, no matter what the cost (or reward) may be if we wait. Instant everything so why would we care about tomorrow when we are living for the present?


sierra_club_sux
Posted 15 May 2006 at 08:42 am

This is the reason the lottery has the lump sum vs. payments for 20 years option. And people give up several million dollars because they cant imagine payments...


Avenger
Posted 15 May 2006 at 09:32 am

sierra_club_sux said: "This is the reason the lottery has the lump sum vs. payments for 20 years option. And people give up several million dollars because they cant imagine payments…"

Actually, I seem to recall that studies have been done that show taking the payment options is not the way to go. Newsweek or perhaps Money ran an article on what to do if you win the lottery; I remember the early steps having to do with maintaining anonymity. They also said that you need to hire a financial manager, then let him make your money earn money.

Essentially, you'd either be rich off the earnings of your lottery winnings, or you'd make it last significantly longer.


jchristman
Posted 15 May 2006 at 09:36 am

In reference to the lottery post -- the jackpot is always the "annuitized total" meaning that by the end of the annuity length, the winner would have recieved that amount in payments. If one thinks that they can invest the lump sum in such a way as to beat the annuitized rate of return then it is wiser to take the lump sum. The key is that at any given rate of return, the lump sum exactly equals the amount of the 20 year payments. So really there is no right answer, either way it's the same amount of money (have no clue about tax consequences.)


Melon Head
Posted 15 May 2006 at 09:46 am

sierra_club_sux said: "This is the reason the lottery has the lump sum vs. payments for 20 years option. And people give up several million dollars because they cant imagine payments…"

This has little to do with hyperbolic discounting. What happens in this case is that the lottery winner opts to take a lump sum based on a present value analysis of the collective future payments. The assumption is that a lump sum now, invested at an assumed interest rate until a given point in time would equal the amount that each individual payment would earn "synchronized" to the same point in time. Obviously, the payer of the money assumes an interest rate in his/her favor (the higher the interest rate, the lower the initial lump sum).
eg: $100/year over 5 years at 10% simple interest would result in $622.51 at the beginning of the 5th year
What "lump sum" NOW, kept in the bank untouched at the same interest rate, would result in the same amount? You do the math.


sierra_club_sux
Posted 15 May 2006 at 10:22 am

Ok, thanks for clarifying that for me. I've never heard the "annuitized total" philosophy before but it makes sense. I do appreciate the clarification. So winning the lottery entails quite a bit more than I had ever assumed, seems that one would have to have some sort of financial literacy to compare all the interest rates in deciding how to make the most of their winnings.


mancho
Posted 15 May 2006 at 11:21 am

Melon Head said: "This has little to do with hyperbolic discounting. What happens in this case is that the lottery winner opts to take a lump sum based on a present value analysis of the collective future payments. The assumption is that a lump sum now, invested at an assumed interest rate until a given point in time would equal the amount that each individual payment would earn "synchronized" to the same point in time. Obviously, the payer of the money assumes an interest rate in his/her favor (the higher the interest rate, the lower the initial lump sum).


eg: $100/year over 5 years at 10% simple interest would result in $622.51 at the beginning of the 5th year

What "lump sum" NOW, kept in the bank untouched at the same interest rate, would result in the same amount? You do the math."

One might assume that this is the type of decision people make, but I'd be willing to bet that most of the people that take the lump sum rarely invest the money.


sherashi
Posted 15 May 2006 at 11:41 am

This article makes a couple of assumptions. The biggest one is that physical benefits are more valuable than psychological benefits. This simply isn't true in many situations. There is a big difference between surviving and existing. Just because someone makes a decision that is not the best one physically does not mean their decision was not the best one overall.

And the next assumption was using AA as an example for the success of something. Although AA may help certain people, statistically speaking it does no more good than trying to quit on your own. The success rate for both is about 5-6%. Not exactly success if you ask me.

Whichever way you want to live you can't change that you "exercise, eat well, and die anyway."


rhea_sun
Posted 15 May 2006 at 01:07 pm

at any rate, it's been said that what doesn't kill you

makes you stronger


apology
Posted 15 May 2006 at 01:31 pm

very good article. congratulations Mr Bellows. I'm sure there is a lot more interesting stuff like this that never gets read and understood.


EVERYTHINGZEN
Posted 15 May 2006 at 02:26 pm

Alcoholism is a disease, I think that's bit of a stretch from not being able to keep your hands off the twinkies. And the support groups do work, but they will not be as effective as you would like to see because they are dealing with addicts. Drug and alcohol addictions are very serious and very different from the inability to stop eating chocolate, not to mention much more dangerous.

AA is not designed to make people stop drinking. It's designed to help those who do quit continue down the right path. As Mr Bellows put, they offer a more objective point of view.

Being obese and a food addict and surrending to temptation is one thing. There is however, definately a line between eating too much red meat for the heart unhealthy and smoking too much crack. You cross from a psychological "want" in the food department, to a drug addicts psychological and physiological "need" for more alcohol and more drugs. Apples and oranges.

If you ever have the unfortunate oppurtunity to see either an alcoholic or a drug addict go through withdrawals, you'll see what I mean. Not really comprable to twinkie withdrawal.


Matt Apple
Posted 15 May 2006 at 02:51 pm

Economists call this "Time Preference".

Time Preference can be defined as the degree to which a present good is preferred over a future good. A heroin addict that sells everything he has for his next hit has very high time preference. Someone who saves their pennies by buying the generic ketchup has very low time preference. Neither of these can be called "irrational" because value is subjective and can't be meaningfully interpersonally compared.


Jake Brake
Posted 15 May 2006 at 04:08 pm

Hard work pays off over time, but laziness pays off right now.


Hayley
Posted 15 May 2006 at 04:57 pm

This doesn't seem like something that would need to be studied, it's so obvious. The hyperbolic term is interesting, though.


Rachel
Posted 16 May 2006 at 05:29 am

Agreed, it's an interesting subject for anyone into psychology and behavioral studies. However, I think my favorite part was "harder than nailing Jell-o to a tree".

I pictured lime Jello, and the quintessentail top-of-a-grassy-knoll-oak-tree-with-a-swing.


DWRoelands
Posted 16 May 2006 at 12:53 pm

In my experience, the most reliable metric of a person's character is how willing they are to sacrifice instant gratification for later benefit.


goodluckbear
Posted 18 May 2006 at 12:48 pm

Intruiging - i'd never really thought to think about this before.


orc_jr
Posted 19 May 2006 at 09:16 am

I will gladly pay you tomorrow for a hamburger today.


Ayan
Posted 15 July 2006 at 09:19 am

Temporal myopia is a scientific term for a focus on the present which most, if not all, human beings have, simply because we live in the present and might not be that future CEO or ambitious enough individual aiming for something in the future. It is based on present personal circumstances, present personal preferences, and present personal lessons from experiences in the past, which has already happened. Taken in that context, tt is completely rational, in the sense that the individual's decisions are not geared towards future benefits but benefits which can be derived from what is here now.

The time when the focus on the present becomes an irrational focus is when the individual with the focus is also focused on a future benefit or benefits. The individual would then make decisions to try and bring that benefit or benefits closer to the present reality based on present circumstances and whatnot; or they will hold those wants close to heart while not changing anything of their present to accommodate and realize them, making them nothing more than ideals.

The man with heart disease risks who continues to live with detrimental factors and enjoys those factors for their present benefits (the taste, the ease of laziness, etc), without as much care for living longer without heart disease risks is not irrational. But the man who wants to live longer, stay in shape, and or stay handsome without the problems associated with heart disease ... yet still eat greasy foods and not exercise ... That makes him irrational.

Like someone said, to judge something ojectively (in this case, as rational or irrational) would make it subjective as there are a lot of of factors which might hold a place in the situation - many of which factors are relative to other factors. It had been slightly presumptuous to deem all individuals of temporal myopia as irrational, when only the factor of 'decision making for future benefit/s geared towards future benefit/s' in play. Not everyone meticulously plans out their tomorrows, or follow through with whatever plans they've managed.

This is now off-topic, as it is a reply to another reply and not to the article itself.

EVERYTHINGZEN said: "Alcoholism is a disease, I think that's bit of a stretch from not being able to keep your hands off the twinkies. And the support groups do work, but they will not be as effective as you would like to see because they are dealing with addicts. Drug and alcohol addictions are very serious and very different from the inability to stop eating chocolate, not to mention much more dangerous.

Actually, the inability to stop eating chocolate or any other foodstuffs is being studied and argued about. For one, scans of the brain of food addicts show that the part of the brain active during drug/alcohol use for drug/alcohol addicts is also active in their own brains. This suggests that while a majority of foods do not have the chemically induced addiction as does some drugs and or alcohol, the individual has developed a psychological dependence that's on par with the dependence of drug/alcohol addicts. The brain is convinced that it needs the food.

For another, it's debatably just as dangerous being four hundred pounds overweight as it is being notably underweight and stupid on drugs and or alcohol. Being too overweight makes one suceptible to various health hazards (diseases, conditions, etc) which will only accumulate and worsen the longer the food addict continues consuming food. So far, medicine can't stop psychological pleasure and addiction, so treating just the aforementioned problems by themselves will simply be a temporary fix. What's even worst is that while some drug and or alcohol addicts show a decrease in motivation to care about anything save their poison of choice; intelligence, or simply the ability to recall facts and understand how these facts fit together; and the ability to make rational decisions, most food addicts are incredibly aware of their problem and suffer from it as much as they get pleasure from it.

Lastly, one has to differentiate clearly between an addiction and reluctance. An addiction hurts the individual psychologically and physiologically while the individual indulges in the object of addiction, while they try not to, and while they aren't indulging in said object. (The few cases of actual food addicts suffer from highly irrational urges to get to the food when they are out, which sometimes puts themselves and others into unfavourable conditions.) A reluctance is probably from a habit which has psychological benefits, but is not so out of bounds as to harm the individual to a great degree. (By making them too overweight, underweight, incredibly irrational, etc.)


pincamel
Posted 20 July 2006 at 10:55 pm

The comments on this article are more interesting than the article itself. Certainly a rarity in my experience of the internet. I will contribute one of my favourite quotes.

- I would rather die living than live while I'm dead- Jimmy Buffet

I have known people who have lived their lives to both extremes. Some are dead, others may as well be as they are miserable in life. Harkens to mind the Bhuddist philosophy that seeking the middle path may be the best choice.


humblebumble
Posted 30 December 2006 at 01:06 pm

I agree with pincamel. The comments for this particular article are extremely interesting. I haven't read all of them however and so I hope I'm not repeating someone else’s idea. I wonder how much more prevalent temporal myopia is now than 100 years ago (i.e. industrial revolution). Could some of our dailiy recklessness be a result of our assured future rather than our possible death? For instance, unhealthy eating is not the killer it could be or used to be. With procedures like stomach stapling, liposuction and bypass surgery we can afford to be much more reckless simply because the consequences have been removed from the equation. The same principle applies to reckless driving offset by airbags and mandatory insurance. The legislation that is implicit in our daily lives (building codes, traffic laws, zoning, harassment and assault laws) as well as programs designed to bring aid to homeless, battered persons, or unemployed all act as safeguards to risks that one may take today against consequences of tomorrow. Another example is the amount of debt that individuals incur early on nowadays.
Perhaps our collective efforts to reduce the death and discomfort that satisfying our genetic, instinctual drives incurs is exacerbating the hyperbolic curve.
You see how easily this could become a tirade against some of the practices used by business today?

Note- No judgment on governmental programs or legislation is implied by my comments. The usefulness of those things is a completely different debate.


sd9sd
Posted 07 December 2007 at 02:49 am

Tipu Sultan's quote: "It is far better to live like a Tiger for a day than to live like a jackal for a hundred years"
I think he makes sense.


Diana
Posted 18 April 2008 at 01:02 pm

I've already read an article on this topic, you may find it at http://megaupload.name/


dodder
Posted 27 May 2009 at 07:54 pm

Here's an interesting Anti-Hyberbolic Discounting thought.

Let's say that we can use a formula to express overall gratification for our entire lifetime.

Let's make up some fake number range of 100-200 representing the min/max subjective gratification one can acheive from life.

If I were to strongly suggest from scientific evidence, can't possibly prove as everything is subjective, I'm just leading up to an additional factor, that an overdose of Morphine will provide one with a gratification rating of 20000! That's 100 times as much gratification as one could possibly expect or hope for in their lifetimes. However, the down side is that you'd die within minutes. How many people would chose this option? I would imagine very, very few.

This would add two additional ignored factors. Future value of further experiences unrelated to the object in question and satisfaction with the amount of gratification I will receive without receiving the object of gratification at all. If I were a person with an excrutiating medical condition I might choose the Morphine route. If I had lived a life of personally subjective gratification with little dissapointment throughout I would most likely expect that to continue (that expectation increasing in proportion to the length of time I've already lived it) and would not consider the Morphine route even given that I did believe it would be 100 times greater than the entire duration of my life because I'm satisfied with the life I've lived.

Point being that the example of cardiac arrest patients not reforming is that it's also possible that extended future experience could actually be depreciating the future value of the object in question.

Clearly there's a more complex mathematical formula at play that our brain invokes.

Future value is not just a SUBJECTIVE valuation of an object now versus getting a greater value from the object later. It has also been pointed out that it must include a probability discount of actually getting that object later, a potential discount for less enjoyment when getting the object at a later date. It also must include an adjustment for preceived value of continued future experiences and the personal satisfaction level of what the person has already felt they've received and will continue to receive completely unrelated to the object in question.

Of course that's just an overly complicated way of saying, "Do I live in the now or am I happy enough with what I have now and/or hopefully will get later?" But then that sounds like I haven't really thought it through very carefully and am being irrational if I choose the now because of course I don't appreciate what I've got and the future will always be better.


sd9sd
Posted 22 February 2010 at 09:40 pm

From the article: "There are many tasks for which the human brain is ably suited, but clearly it can be surprisingly bad at planning for the future"

I disagree. The human brain plans perfectly for the future. The brain knows what kind of world it lives in: A world where you could be crushed or eaten in an instant. A world where your life could end at any moment. Hyperbolic discounting is the best bet for living in such an uncertain world. It's better to do the eat drink and be merry bit, as long as the person's brain is also wise enough to realise that the chances of living till 50 is greater than the chances of being hit by a bus tomorrow :)


Prakhar
Posted 09 November 2010 at 08:56 am

This site is \m/


mlryan
Posted 03 May 2011 at 09:04 pm

I found the article interesting, but your ignorance on AA to be infuriating. AA is a well designed program that has worked for everyone I know, and the fact that you claim it is not well designed only discredits the program and, in my opinion, stomps on the extraordinary efforts of recovering alcoholics all over the world.

I would like to respectfully request that you either add the AA example back in or remove the comment that you even mentioned it at all.


Doug
Posted 23 February 2014 at 12:28 pm

Be interested to know what you're referring to in saying that AA is not well-designed. Could be a lot of things. And besides, it's only polite to provide some justification for a blanket statement published on the internet that is sure to offend some folks.


jerome
Posted 28 February 2014 at 02:22 pm

Interesting but you don't mention the most fascinating aspect of the subject: academis research has showned that this tendency is highly correlated to the kind of future tense used in the language. Stats in countries that have two official languages are especially fascinating


Alan Bellows
Posted 28 February 2014 at 03:29 pm

jerome said: "Interesting but you don't mention the most fascinating aspect of the subject: academis research has showned that this tendency is highly correlated to the kind of future tense used in the language. Stats in countries that have two official languages are especially fascinating"

You're referring to the studies suggesting a correlation between future planning and languages that have a "subjunctive mood." I believe most of that research was published after this article was published way back in 2006. Perhaps one day I'll need to come back and update this article with some of that new data, but it's difficult to find such time.


AlphaThinker
Posted 12 April 2014 at 03:58 am

The thing is that our brain has evolved to deal with a wild reality where uncertainty and risk are quite high and life expectancy very low. In example, having an healthy life-style is completely useless from an evolutionary point of view: no matter how much junk food you will eat, you will be likely to survive until the age of 40 at least, giving you the possibility of procreating. Basically our brain is tuned for an high-risk environment, so it can behave irrationally in a low-risk environment.


mlaiuppa
Posted 26 March 2015 at 10:01 am

I want to thank you for this article.

I came here looking for it to present to my nephew, who has a bad case of instant gratification.

He went to Berkley on a double major and then dropped out a semester short of graduation to join the Navy. I was discharged on a medical before he finished boot camp.

Then he decides to go to Coleman College to get a degree in computer technology.

Now I hear he has dropped out again after completing only a few certificates to get a job. Doesn't have a job lined up.

So rather than finish a degree to get a higher paying job, he quits now and is pretty much doomed to a lifetime of lower paying jobs.

He won't listen to any of us about what a bad decision this is.

And he had a free ride. My Dad was paying for it all. Now if he wants any additional school he'll have to pay for it out of his own pocket, on whatever low salary he manages to pull in from whatever kind of job he manages to find.

This was a 4.0 valedictorian of his class with AP classes up the whazoo. Now he is just a dropout and a loser.

I blame the video games but your mileage may vary.


END OF COMMENTS
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