Hyperbolic Discounting: Why We Prefer Instant Rewards Over Bigger Future Gains 💰🕰️ @hyperbolic_labs

1/ Ever wondered why people choose $50 today over $100 a year later? 🤔 This behavior is called Hyperbolic Discounting—a psychological bias that makes us favor immediate rewards, even if waiting is more beneficial. Let’s break it down! 🧵👇

/ What is Hyperbolic Discounting?
It’s a cognitive bias where we value rewards disproportionately based on time. Instead of a rational, linear approach, our decision-making follows a hyperbolic curve—we strongly prefer instant benefits over delayed ones. 

3/ Example of Hyperbolic Discounting
Imagine two choices:
➡️ $50 today OR $100 in a year
➡️ $50 in 10 years OR $100 in 11 years
In the first case, most choose $50, but in the second, they wait for $100! Why? 

5/ Real-World Examples of Hyperbolic Discounting
🛒 Shopping: Flash sales & discounts manipulate this bias!
🍔 Health: Choosing junk food now over long-term fitness
💸 Investments: Spending now vs. saving for retirement


6/ Hyperbolic Discounting in Finance 💰
Ever wondered why people struggle to save money? Because spending now feels better than saving for the future. This is why:


7/ Hyperbolic Discounting in Crypto & Trading 📈
🚀 Many traders sell early instead of holding for bigger profits
📉 FOMO-driven investments happen because people prefer instant gains


8/ How to Overcome Hyperbolic Discounting?
🔹 Commitment Devices – Automate savings/investments
🔹 Visualize Future Rewards – Imagine long-term benefits vividly


10/ Conclusion
Hyperbolic Discounting explains why we struggle with long-term planning and prefer instant rewards. But recognizing this bias can help us make better financial, health, and business decisions. Ready to beat this bias? 

4/ Why Does This Happen?
🔹 Our brains are wired for instant gratification (dopamine rush!)
🔹 The "present" feels more real than the future
🔹 Uncertainty—waiting feels risky, even when the reward is guaranteed