Hyperbolic discounting is a remnant of our animal past. Rats never give up a piece of cheese today to get two pieces tomorrow. Humans aren’t very different too.
Few months back when I quit my job to join Vishal at Safal Niveshak, I had to return my laptop to my earlier employer, and buy a new one for myself. This got me started on the herculean task of selecting from thousands of choices available on numerous e-commerce websites. After weeks of excruciating process of comparing, shortlisting, and researching, I finally zeroed in on my final choice. Then started the wait for online discounts.
Very soon, the so called online-sale-season (i.e., weekend) arrived which offered a ‘whopping’ Rs 75 discount on my selection. So much for the patience, but for a self-proclaimed prudent consumer it still was a good deal!
Just when I was about to place the order, I saw the option of same day delivery for an additional Rs 100. Guess what yours truly did? He didn’t hesitate for a moment to take the offer.
Ironically, I waited for a week for a small discount but when the time came for buying I couldn’t wait another day and forked out extra money just to get my toy immediately. What happened to my admirable qualities of patience and prudence?
A little research on Google revealed that the introduction of ‘get-it-now’ caused me to behave irrationally. Scientists, as usual, have a name for this tendency – Hyperbolic Discounting.
On one hand, when I am forced to wait for six days, I don’t mind waiting for seven days. But when I am told that I can get something today instead of tomorrow, my temptation refuses to wait for another day.
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