# Hyperbolic Discounting

Fleeting- External reference: https://en.wikipedia.org/wiki/Hyperbolic_discounting

singularity effect, psychic numbing, prospect theory

Given two similar rewards, humans show a preference for one that arrives sooner rather than later. Humans are said to discount the value of the later reward, by a factor that increases with the length of the delay

Many psychological studies have since demonstrated deviations in instinctive preference from the constant discount rate assumed in exponential discounting.[4] Hyperbolic discounting is an alternative mathematical model that agrees more closely with these findings.[5]

According to hyperbolic discounting, valuations fall relatively rapidly for earlier delay periods (as in, from now to one week), but then fall more slowly for longer delay periods (for instance, more than a few days).

standard experiment used to reveal a test subject’s hyperbolic discounting curve is to compare short-term preferences with long-term preferences. For instance: “Would you prefer a dollar today or three dollars tomorrow?” or “Would you prefer a dollar in one year or three dollars in one year and one day?”