Intertemporal choice

Intertemporal choice refers to the decisions individuals make regarding what to do at different points in time, particularly when it involves trade-offs between immediate benefits and future rewards. For example, choosing to spend money now on a vacation versus saving that money for a future investment. This concept highlights how people evaluate and prioritize their preferences over time, often influenced by factors such as interest rates, individual patience, and risk tolerance. Understanding intertemporal choice helps explain behaviors in finance, health, and personal decision-making, as it illustrates the balance between present gratification and long-term goals.