Future Discounting

Future discounting is a concept in economics and psychology that describes how people perceive the value of future rewards compared to immediate ones. Essentially, it’s the tendency to prefer smaller, more immediate benefits over larger, delayed ones. For example, someone might choose to receive $50 today rather than $100 a year from now, valuing the immediate cash more highly. This behavior reflects how we evaluate risks, delays, and the uncertainty associated with future events, influencing decisions in areas like saving, investing, and personal choices.