Have you ever bought an item on impulse and later realized that it had dropped in price? Well, this phenomenon has a name and is known as hyperbolic discount.
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In economics, hyperbolic discounting refers to that inclination that human beings have for choose immediate rewards instead of payoffs that may come in the futureeven when these short-term gratifications are smaller.
This type of behavior has been studied for decades with the goal of better understanding the logic behind the value we place on money, return on capital, and decision making. In fact, This tendency is also usually described as a psychological bias.
Because? Some experts suggest that we tend to believe that the closer the reward is, the more attractive it looks.
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As Irene Scopelliti, professor of Marketing and Behavioral Sciences at the Bayes Business School of the University of London (England), explained to ‘BBC Mundo’, hyperbolic discounting, “often leads us to make decisions that our ‘future self’ might regret.”
Regarding the reasons that They drive us to make these types of immediate determinationsthese are varied.
For some experts, this bias responds to our evolutionary process, making immediacy a magnet. Uncertainty also intervenes here and the idea that it is better to have something certain now, than to wait for what may happen in the future.
Although this can be activated in different everyday circumstances, to give an example in financial matters, hyperbolic discounting usually occurs when we make monetary decisions like when asking for a loan.
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How to deal with it?
Expert recommendations include establishing prior commitments to avoid future temptations. For this, you can schedule periodic investments that cannot be easily postponed.
It is also advisable to use reminders, whether visual or written, about the advantages of maintaining a decision in the long term. In addition, it is recommended to create reflection periods, that is, wait a reasonable amount of time before making any non-essential purchase to avoid compulsive decisions.
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