Hyperbolic discounting is a cognitive bias that occurs when individuals place a higher value on immediate rewards or consequences compared to future ones. This can lead to short-term thinking and a lack of consideration for long-term consequences.
In the context of business and technology, hyperbolic discounting can have significant implications. It is important for organizations to be aware of this bias and to take steps to mitigate its effects. This can involve creating a long-term vision and setting clear, measurable goals to help guide decision-making and keep the focus on the long-term consequences of actions.
One way to overcome hyperbolic discounting is through the use of decision-making tools and techniques, such as cost-benefit analysis or discounted cash flow analysis. These tools can help to quantify the long-term consequences of different options and provide a more objective basis for decision-making.
Another approach is to encourage a culture of long-term thinking and planning. By fostering an environment that values and rewards long-term thinking, organizations can encourage employees to consider the long-term consequences of their actions and make more informed and strategic decisions.
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