Apparently it takes smarts to delay gratification

As prudent investors we need to learn to develop patience and delay our gratification. For managers of large corporations this concept is important in managing for long term value over short term performance bonuses. Here is a link to a study on the psychology of individuals who can delay gratification. (Click here to skip intro and read Article)

Article Introduction (Via Science Daily)

If you had a choice between receiving $1,000 right now or $4,000 ten years from now, which would you pick? Psychologists use the term “delay discounting” to describe our inability to resist the temptation of a smaller immediate reward in lieu of receiving a larger reward at a later date. Discounting future rewards too much is a form of impulsivity, and an important way in which we can neglect to exert self-control.

Article Excerpts (Via Science Daily)

“The results show that participants with the greatest activation in the brain region known as the anterior prefrontal cortex also scored the highest on intelligence tests and exhibited the best self-control during the financial reward test. This was the only brain region to show this relation. The results appear in the September issue of Psychological Science, a journal of the Association for Psychological Science.”

“Understanding the factors that support better self-control is relevant to a host of important behaviors, ranging from saving for retirement to maintaining physical and mental health,”

Click here to read the full Article

About Miguel Barbosa

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12. September 2008 by Miguel Barbosa
Categories: Curated Readings, Psychology & Sociology | Leave a comment

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