Hyperbolic Discounting
Behavioral & Decision Making
Hyperbolic Discounting
The tendency for people to prefer smaller, sooner rewards over larger, later rewards — with the preference reversing as both options move further into the future.
Explained
- People overvalue rewards they can have now and steeply discount ones that arrive later.
- The pull toward the immediate option is strongest right at the moment of choosing, even when the delayed reward is bigger.
- Distance in time makes future costs and benefits feel abstract and easy to ignore.
- A free trial works because the benefit is instant while payment sits far enough away to feel unreal.
In the wild
No indexed product screens use this model yet — check back as more products are analyzed.
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