Concept · Cognitive Bias: Economic and consumer biases
Hyperbolic discounting
Origin: Ainslie, 1975; Laibson, 1997
The Biological Bridge
This business construct is human-invented, but the outcome it's trying to achieve has deep biological roots.
Surface Construct
Strongly preferring immediate rewards over larger delayed rewards
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Underlying Outcome
Account for uncertainty and mortality in reward timing
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Biological Mechanism
Mortality-adjusted valuation. A bird in the bush IS worth two in the bush when you might be dead tomorrow. In environments with high predation, disease, and resource uncertainty, future rewards are genuinely worth less because you may not survive to collect them. Discount rates should match environmental mortality rates.
Key Insight: Hyperbolic discounting is calibrated to ancestral mortality. It's 'irrational' only in modern environments where tomorrow is nearly guaranteed.
The Full Picture
Birds offered 2 seeds now versus 6 seeds in 10 seconds choose 2 now—but choose 6 over 2 when both are delayed by 60 seconds. Future rewards lose value hyperbolically: steep discounting for near-term delays, shallow for distant ones. This evolved because in volatile environments, distant rewards often vanish (spoilage, theft, death). Hyperbolic discounting isn't impulsivity—it's rational when tomorrow is uncertain. The brain treats delayed gratification as a gamble that might not pay out.