If you’re like most people, you know very well what it’s like to procrastinate. On more than one occasion, you’ve probably told yourself stuff like:
- “I should stick to my diet, but if I have a cupcake now, I can make up for it tomorrow.”
- “I should go to the gym, but I really don’t feel like it right now, so I’ll get started Monday morning.”
- “I should save more for retirement, but I want to buy a new phone, so I’ll start saving next month.”
Whenever you reason along these lines, you’re falling victim to what behavioral economists call…
It sounds complicated, but it just means that we value rewards differently at different points in time. In the short term, we’re impatient and prefer immediate, smaller rewards. But in the long term, we’re patient and prefer distant, bigger rewards.1
A classic experiment2 illustrates it well. When researchers offer people $100 today or $120 in a month, most people choose the $100. But if they offer people $100 in a year or $120 in a year and a month, suddenly, most people will wait the extra month to get the $120.
Even though the time and value difference are the exact same in both scenarios, we perceive them very differently. The further into the future a reward is, the more we tend to discount its value. So it’s really no surprise that we consistently find ourselves procrastinating.
The short-term pleasures of eating a cupcake, taking a nap, or playing around with a new phone are immediate and tangible. Conversely, the long-term benefits of eating healthy, exercising, and saving money for retirement are far away and abstract.
That imbalance makes us choose short-term pleasures now while postponing long-term benefits for the future. A study on grocery-buying habits3 demonstrates it nicely: when buying groceries online for delivery tomorrow, people buy a lot more ice cream and a lot fewer vegetables than when they’re ordering for delivery next week.
The opposite of hyperbolic discounting is what psychologists call delayed gratification, the ability to resist smaller immediate rewards to receive larger future rewards.
Research links this ability with a host of positive life outcomes such as better grades, lower substance abuse rates, greater financial security, and improved physical and mental health.4
And it makes sense, doesn’t it? No matter what goal you want to achieve, it almost always require you to resist something easy and do something hard.
To be successful, you have to mitigate hyperbolic discounting so you can make wise choices in the moment and get better outcomes in the future.
If you regularly delay gratification, you’ll become increasingly better at it. Over time, you’ll develop relentless self-discipline. And your future self will be grateful you did.
This article is an excerpt from my book The Decision-Making Blueprint.
- Models of Temporal Discounting 1937–2000: An Interdisciplinary Exchange between Economics and Psychology
- Time Discounting and Time Preference: A Critical Review
- I’ll have the ice cream soon and the vegetables later: A study of online grocery purchases and order lead time
- The Marshmallow Test: Mastering Self-Control by Walter Mischel