Video: How People Look At The Future When Making Choices
Several readers have asked for more articles/material related to time preferences and the psychology of time. Here’s a video via MIT on decision making & times perspectives.
Introduction (Via MIT World)
Neither philosophers nor economists can satisfactorily explain some quirky aspects of decision-making, such as why most people elect to receive a 30-minute massage in the next two weeks, as opposed to a 45-minute massage a few months down the road. Shane Frederick teases apart preferences like these, coming at them from different perspectives, and raises questions about the degree to which rational thinking drives human choices.
Frederick’s talk looks at how people weigh the future when making choices. Some studies have shown that “people give less weight to the future – they discount future utility the way bankers discount future streams of income,” says Frederick. But other research Frederick cites demonstrates that people like to save the best for last. In ordering a sequence, study participants chose to eat strawberries, then liquorice, and then jelly beans — holding out for “the better thing later,” in this case, the sweetest treat. In another example of people preferring “improving sequences,” subjects chose to dine at a quotidian Greek grill first, followed by a fancy French restaurant. But in a “weird preference reversal,” people chose to pay more for a “declining sequence,” where they would eat first at the expensive French restaurant, and then at the Greek grill. There is incoherence in people’s preferences, which has long puzzled thinkers from different disciplines.