Hyperbolic Discounting and Self-Destructive Behaviors

Abstract

In the previous chapter, I explained that people’s degrees of impatience are affected by various choice conditions and frames, all of which cause a variety of anomalous phenomena in their intertemporal choices and behaviors that traditional economics cannot explain. In this chapter, I shall deal with hyperbolic discounting or present bias. As explained in Chap. 1, under hyperbolic discounting, more immediate gratifications are discounted at higher discount rates, and people are less patient in waiting for less delayed rewards.