🛍️ Hyperbolic Discounting:
Preference for smaller, sooner rewards over larger, later ones
A cognitive bias which explains why people prefer smaller, immediate rewards rather than larger rewards in the future.
This is often called the "present bias".
People are naturally impatient, and despite being good at planning for the future, are usually terrible at making decisions that sacrifice today for tomorrow.
Choosing to eat junk food today, rather than focusing on long term health.
Spending $100 today, rather than saving and investing that cash.
Opting for a $100 reward today, rather than a $120 reward in a week.
It's one of the reasons why payday loans are so effective—people can spend now.
The present value of the reward is being discounted in a trend that follows a mathematical curve called a "hyperbola".
✅ Churn
If the value of your app is very long term (e.g., investing, life insurance) you're constantly fighting people's short term preferences (i.e., seeing the cash leave their account, that they could be spending).
✅ Feature usage
Some of your features may be underused, if it's framed as a very long term benefit with short term trade-offs.
✅ Habits
People slip into short term reward habits (both positive and negative).
It's much harder to get people to stick to long-term habits.
✅ Effort & motivation
This usually comes down to framing—can you explain the long term benefits, and why it's worth a short term sacrifice.
You just need to be aware that people have a preference for the short term, even if it's objectively a worse "deal".
e.g., people will likely choose $100 today over $102 tomorrow.