Hyperbolic Discounting

There are many ways to observe and explain the behaviors I described in the previous article. Hyperbolic discounting is a way to think about the issue.

On the one hand, we have the thought that people tend to push things they don’t like further in the future, which is basically what thinking about “low time preference” gets you.
On the other, thinking about hyperbolic discounting allows you to analyze the tendency for people to choose what they’d like now, even in exchange for things they’d not want later. In other words, we tend trade “good times now” for “bad times later”, such as partying hard in exchange for feeling beat, cranky and in pain tomorrow.

This may have useful insights to apply when trying to calibrate time preference. Perhaps reframing the future situation or doing a mental excercise that allows us to feel as if the bad times are going to happen before the good times do, we’d be able to help balance our decision making tendencies.

There are some good reasons for hyperbolic discounting – such as increasingly lower certainty about the outcomes when the chains of event are spread on very long stretches of time.

In any case, today I ran a tiny experiment to improve my productivity without varying my time preference – I killed all the distractions and sat down to work. It was good for most of my work session, but I was filled with anxiety that things may be happening which were important for me, and I’d not find out because I got disconnected. I’ll keep the experiment running for a few more days and see what happens; I expect that I’ll get used to the pattern and stop feeling anxious.

I still got more done than usual, which is nice. I hope the pattern continues.

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