Updated: Nov 15, 2018
Hyperbolic Discounting is a cognitive bias that states we'll avoid waiting now more than we'll avoid waiting some time in the future. Put another way, when compared to how much we value time now, we'll significantly "discount" the value of time in the future.
Imagine your best friend just handed you a delicious chocolate chip cookie. It's cooled down enough from the oven that you can gingerly hold it in your hands for few seconds. Suddenly, there's cool glass of milk next to you. Should you break from your diet? You don't want to... but you want to. You eat the cookie. "Now" you: 1, "Future" you: 0.
Hyperbolic Discounting is one factor that makes choosing delayed gratification so difficult! The key is to realizing you value things differently depending on the time-frame of which will receive them. The "now" you values your time (read: will pay much more to avoid a delay) much more that the "future" you. The "now" you is an expert at justifying what's right in front of you, the delicious chocolate chip cookie, the sale at REI, the manageable monthly payment for that new BMW. The "future" you knows that you'd really prefer to lose a few pounds, don't need another fleece sweater, and knows that that BWM isn't really a fiscally responsible decision with your current budget.
Here are some common Hyperbolic Discounting examples that come up during design environments:
As time-stress increases, your team will be more biased to accepting price increases for minimal lead-time reductions.
Investors / Leadership may be more willing to put more resources into projects they view as closer to production, especially if they can feel, taste, smell, or touch it.
Team members won't focus on development or training if the company culture puts a focus on the day-to-day work and being busy.
Project teams show a preference for focusing on fighting fires rather than long term innovations.
Tips for breaking the hyperbolic discounting cycle:
Try framing immediate decisions as "future" decisions. Your future self is more apt to consider the long term impacts, appropriately weigh the pros & cons, and help you identify what you really want.
Develop a method so you work on items that you've deemed important ahead of time, rather than reacting in the moment. Agile & Scrum and some well known frameworks to achieve this.
Step away away what's captivating your attention. Aroma, visuals, sounds, and even being physically close to an object can turn on the "now" autopilot.
Avoid "pay-it-later" purchases where possible, especially when it comes to impulse buys.
For further information on Hyperbolic Discounting, check out these links:
If you'd like to share your Hyperbolic Discounting story, or have a question - leave a comment below. Thanks for sharing. - Ryan