Hyperbolic Discounting and the Joy of Now
Most people think of irrationality as a flaw to be fixed. Economists, psychologists, even self-help authors all conspire to beat it out of us with spreadsheets, mindfulness apps, and talks of efficiency. But here’s a thought: what if irrationality isn’t the noise, but the signal? A glitch worth listening to.
For instance: hyperbolic discounting. That absurd little tendency of ours to prefer $100 today over $200 in a year, but then to say we’d rather have $200 in three years than $100 in two. The numbers haven’t changed, but the proximity has. Traditional economists look at this and say we’re inconsistent. I’d say we’re human. Because what the models forget is that we don’t live in spreadsheets. We live in the context of experience and immediacy.
There’s a brilliant evolutionary logic hiding in this so-called bias. Immediate rewards are tangible, sensory, rich with context. Future rewards are hypothetical, often subject to change, wrapped in uncertainty and—crucially—lack narrative urgency. This isn’t necessarily a weakness. In the ancestral environment, taking the food in front of you rather than waiting for a bigger meal tomorrow probably kept you alive. No one wants to be the idiot who dies of starvation while holding out for a Michelin star in the Sahara (the closest option is possibly Mirazur in Menton, France 🤷).
But modern society treats delayed gratification as the moral high ground. We’re taught to worship the future, to sacrifice the now at the altar of later. And while this makes for tidy pension plans and respectable credit scores, it also sucks the joy out of existence and gives rise to a world where people delay happiness indefinitely, always one milestone away from contentment.
What fascinates me about hyperbolic discounting is how we try to fix it with logic, when the solution might lie in theatre. Immediate rewards are compelling because they’re vivid. So rather than lecturing people into waiting for future benefits, we should work on making those benefits feel immediate. Wrap them in narrative. Give them texture. Add theatre. A pension plan isn’t exciting, but telling someone they’re buying the right to sit on a sun-drenched terrace in southern Italy twenty years from now, sipping wine at 3pm with no emails to answer and no meetings to attend: that’s suddenly a lot more visceral.
The bias therefore acts as a design brief. It tells us exactly what kind of reward structures, messaging, and incentives people actually respond to. When you accept human nature as the starting point (not the obstacle) you stop wasting time trying to fix people and start getting creative about shaping systems.
If your strategy depends on people acting like robots, it’s not a strategy. It’s a spreadsheet delusion.
Ainslie, G., & Haslam, N. (1992). Hyperbolic Discounting. In G. Loewenstein & J. Elster (Eds.), Choice over Time (pp. 57-92). New York: Russell Sage Foundation.