Monday, August 22, 2011

Hyperbolic Discounting and Asking For Favors


Hyperbolic discounting is when you value something more in the present than you do in the future. For example, getting a dollar today is worth more to you than getting a dollar a year from now. It also means that cost today is worse than a cost tomorrow. In some situations, this makes perfect sense. In the money example, inflation and interest mean that a dollar today is literally more valuable than the dollar a year from now. The problem is that we apply this reasoning to things we should not.

I was just reading in Wired magazine about how people tend to put movies they want to want to watch in their Netflix queue, but when it comes down to what they want to watch now, they tend to pick lowbrow movies. So, for example, someone will say they want to watch Kramer vs. Kramer a month from today, but right now they want to watch My Cousin Vinny. What's going on here is that you are screwing over your future self. Your future self seems distant, and you're willing to impose your higher-level desires, what you think a person should do, on your future self as though they were someone else. So people end up getting DVDs in the mail of movies they don't want to watch.


Fitness centers work the same way-- you pay for a membership, forcing your future self to exercise in order to relieve the feeling that you wasted your money.

Pictured is a snowboarder. Snowboarding is regarded as a relatively dangerous activity (I'm not saying that it is-- bicycling is also regarded as dangerous, but it's not. The answers to such questions require empirical study, not cultural common sense.) It could be that hyperbolic discounting encourages this kind of risk-taking. Many physical injuries feel worse when you are older. Are snowboarders screwing over their future selves to have fun today?

This is related to the idea of second-order desires, which are desires about desires. For example, you might want to eat a huge bowl of ice cream, but knowing that it's a lot of calories, you might not want to want the ice cream. When you commit your future self to exercise, you think you should exercise, even though in any given moment you might not be too excited about doing it. Philosopher Harry Frankfurt calls beings with no conflict between their first and second-order desires "wantons" (1971).

How can this work in your favor when asking people to do things? Ask them well in advance. The further in advance, the better, because the further in the future the requested activity is, the more distance the person will feel with that future self (the "hyperbolic" part refers to the curve of how value decreases over time-- exponential discounting is the same idea with an exponential curve.)

So if want someone to help you move tomorrow, they're less inclined to do it than if you asked them if they would help you move two months from now. Two months later, they feel obligated to help because they already said they would, even though, in the moment, they find the thought just as unappetizing.



References:

Ariely, D. (2011). Gamed. Wired p137.
   http://www.scribd.com/doc/58854545/ArielyWired

Frankfurt, H. (1971). "Freedom of the Will and the Concept of the Person"Journal of Philosophy 68 (1): 5–20.doi:10.2307/2024717.

http://en.wikipedia.org/wiki/Hyperbolic_discounting

Picture1: Sébastien Toutant, a snowboarder, at the downtown Québec big air competition. He won the event.. By Letartean (Own work) [CC-BY-2.0 (www.creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Picture: By Moxfyre (Own work) [CC-BY-SA-3.0 (www.creativecommons.org/licenses/by-sa/3.0), GFDL (www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (www.creativecommons.org/licenses/by-sa/3.0) or GFDL (www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons
Bookmark and Share

No comments: