Hyperbolic Discounting: Why Now Feels Worth More
We value immediate rewards much more than future ones, which makes saving and dieting hard.
By Felix Narayan | Oct 24, 2026 | 6 min
Would you rather have £100 today or £110 in a week? Many people take the £100. But asked to choose between £100 in a year and £110 in a year and a week, most wait for the extra £10.
This inconsistency is called hyperbolic discounting.
I What it means
Standard economic models assume people discount the future at a steady rate. In reality, people discount the near future very steeply and the distant future less so. Our preferences change as rewards get closer.
II Everyday examples
- — Planning to start saving next month
- — Choosing dessert despite diet plans
- — Putting off health check-ups
- — Buying now, paying later
III Commitment devices
Because people know they may be tempted later, they use commitment devices: automatic savings transfers, locked savings accounts, gym contracts, or deleting shopping apps. These lock in long-term choices.
This is general educational information about economics, not financial, investment, or tax advice. Consult a qualified, licensed professional before making financial decisions.
Further reading
- 1. The Availability Heuristic: Why Vivid Events Feel More Likely
- 2. The Framing Effect: Why “90% Survival” Beats “10% Mortality”
- 3. Status Quo Bias: Why We Stick With Defaults