hyperbolic discounting

Hyperbolic discounting is a behavioral economics concept that describes how people tend to prefer smaller, immediate rewards over larger, delayed ones, often in ways that seem irrational. Unlike traditional discounting, which assumes people consistently value future rewards less as they get further away, hyperbolic discounting suggests that our preference for immediate gratification diminishes over time. For instance, someone might choose to receive $50 today rather than $100 a month from now, even though waiting is the more rational choice. This tendency can impact decision-making in various aspects of life, including finances, health, and personal relationships.