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Temporal discounting (also known as delay discounting, time discounting) [12] is the tendency of people to discount rewards as they approach a temporal horizon in the future or the past (i.e., become so distant in time that they cease to be valuable or to have addictive effects). To put it another way, it is a tendency to give greater value to ...
Time discounting or temporal discounting is a wide range of ideas involving the connection between time and the extent to which an object, situation, or course of action is seen as valuable. The overall theory is that people put more value and worth into immediate events and outcomes, and apply less value to future outcomes or events.
During this time, the researcher left the child in a room with a single marshmallow for about 15 minutes and then returned. If they did not eat the marshmallow, the reward was either another marshmallow or pretzel stick, depending on the child's preference.
Hyperbolic discounting, where discounting is the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs. Hyperbolic discounting leads to choices that are inconsistent over time—people make choices today that their future selves would prefer not to have made, despite using the same reasoning. [52]
In real world situations, "discounting makes sense because of the inherent uncertainty of future payoffs". [55] One study looked at how reward discounting is context specific. [18] By differing the time and space between small and large rewards, they were able to test how these factors affected the decision making in tamarins and marmosets ...
Exponential discounting yields time-consistent preferences. Exponential discounting and, more generally, time-consistent preferences are often assumed in rational choice theory, since they imply that all of a decision-maker's selves will agree with the choices made by each self. Any decision that the individual makes for himself in advance will ...
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The term of present bias was coined in the second half of the 20th century. In the 1930s economic research started investigating time preferences. The findings led to the model of exponential discounting, thus time consistent discounting. However, later research led to the conclusion that time preferences were indeed not consistent, but ...