Self-control and hyperbolic discounting in humans

Summary: the way people choose smaller-sooner rewards or larger-later rewards is well modelled with hyperbolic discounting, as opposed to exponential discounting known from the world of finance. I am wondering if there's a technology we could use to make people choose larger-later rewards more consistently.

I did some reading on self-control recently, and so I found out about hyperbolic discounting through the book The Science of Self-Control. It shows an approach to self-control, along with its consequences for addiction.

If you like video, here's 3 short videos discussing temporal discounting (in order of appearance: no discounting, exponential discounting, hyperbolic discounting).

The key concept here is preference reversal. Apparently, humans (and some animals) tend to prefer larger-later (LL) rewards to sooner-smaller (SS) rewards if both are available in the sufficiently far future. But as time goes by, SS reward becomes disproportionately more valuable and at some point becomes the preferred choice - just because both are now much closer in time.

For example: in the evening we plan to get up at 7 am rather than 9 am, but in the morning that preference seems absurd and we prefer to sleep until 9 am. 

Put another way: instant gratification (smaller-sooner, SS) pleases the present self while delayed reward (larger-later, LL) benefits the future self.

The book presents the idea and lots of related research, along with how this relates to the development of addiction.

For those really interested: Hyperbolic discounting model contains a constant, the discount factor. The lower the constant, the more likely we're to choose larger-later rewards. Research on humans and various animals (e.g. pigeons) indicates that the more developed the animal, the lower the discount factor, i.e. the longer the perspective when making choices. Also, for humans, the older a person is the lower that factor is (i.e. experience makes humans do better choices over time).

I'm haunted by vision of a technology that would help people make better decisions. We usually know which option is the best in the long term, but we act against that judgement anyway. If there was something that would reverse the trend...

Now some tricks mentioned in the book include broadening time horizon when making decisions, or including commitment mechanisms (e.g. setting our environment up so that the SS choice would be more painful should we choose it in the future). However, they are all "soft" mechanisms, i.e. prone to manipulation by ourselves and in my experience simply don't work.

I'm wondering what would work, e.g. what technology or training.

Comments

[Wiktor Dolecki]

I think that it's not the technology that is crucial here. What would be of more use is creating opportunity for exercising discipline. What I men by that is allowing people to spend some time being concentrated only at one task without distractions and with some external support i.e. instructors enforcing some plan of day etc.

I think that after being able to experience the positive effects of discipline on themselves people would have it easier later, because this connection between positive life outcomes and hard work would be more concrete.

[Michal Glomba]

I really like this post, I think this is one of these very basics problems we have to face every day. My initial thought is that we - as human beings - just do not think logically (mathematically) by default as we definitely prefer to stay emotional what ends up in "seize the day" approach. This is relevant to both rewards (pleasant stimulus) and efforts (unpleasant stimulus) - we really tend to chase immediate rewards but procrastinate troublesome tasks requiring tough work. I think it is even a classical optimization problem occuring in nature but with the function's optimum is definitely biased towards faster effects, preferring easy pleasures over hard work, promoting optimism over rationalism. Well, these are we and our human nature.

I am also very interested in some practical methods of reshaping this personal "happiness curve" to reward any longer term efforts more than easy immediate pleasures. I am not sure about society as a whole but my gut feeling is that for us the blunt numbers would be the best alarm to think twice when deciding to chase a short term reward and don't wait for the seed to grow. The best example would be any financial-like decisions: to buy or to rent a flat, to increase savings or to go crazy with spendings, to build a solid investment plan or to allocate spare money into the simplest, most popular saving deposits. But this is simple, it is just a matter of doing math over well-defined financial numbers. Technically, there is Mint in the US, there is nothing like that known to me in Poland semi- or fully integrated with major banks but well... it is definitely not a rocket science. And really, processing numbers is easy.

The rocket science starts when non-numerical prizes come into play, like health. I can decide to go on a diet or to quit smoking or to drive my car less crazier but how can I persuade myself that really I should do it *now* and leaving these decisions open does not help? Well, I think the bare statistics could actually force your mind to make these decisions, naked facts presented as statistical figures should do the work. However, I do not think that this is enough - the raw numbers are just numbers to us, "50 people killed in car accidents in the last weekend" are just 50 random anonymous people somewhere there. To make us think harder we need to add emotions to these figures - the same message presenting latest stats on road kills but extended ie. with just short profiles of the people killed in "name, profession, age" format like "Jenny, student, 21", "Emma, mother of two, 45" will definitely strengthen the message, it will make the point boldly and we frequently need bold signals to make this last step to final decisions Statistics and emotions, this combination should be used in a solution to any of these "seize the day versus be consistent" problems.

Going further, the problem of making our decisions more logical ("well-thought" one would say) than emotional ("romantic") comes heavily from the fact that understanding the world is a difficult thing. And we need to get the full picture to realize the blunt facts, especially once they are somehow difficult. The media does not discuss difficult things extensively, they either show some statistical numbers without much background or drive the audience straight into single emotional stories, bringing down the curtain on the general problem. And even daily information processing is hard nowadays: too many sources, too much noise and so limited time to analyze them all. This is why infographics become popular - one picture is to show you some story in a somehow complete way. And frankly, building infographics with strong stats and real emotions might be the right technical tool to change us and our behaviour - they are viral, they are easily digestible, they just need to make a point. And there are so many really fundamental problems that we still do not get as a society, don't you think?

But can we make a vital business from it? That seems to be another story...

[Jakub Petrykowski]

@Wiktor

How would you ensure people don't get distracted after they started the task?

What would make them start on a task?

What would be the role of an instructor, i.e. how would plan of day be enforced exactly? Can you give some specifics?

@Michal

You wrote "I am also very interested in some practical methods of reshaping this personal "happiness curve" to reward any longer term efforts more than easy immediate pleasures."

This is exactly what I'm after. You seem to be suggesting that if we get presented with some information / visualization, it might influence us so that we start to prefer larger-longer choices more often?

Is it something you tried on yourself?

I do think that for me, the greatest value of wisdom or knowledge I acquire by reading (books, Internet, TED.com, etc.) is that I get *motivated*, i.e. I slowly get my mind to attach higher values to long-term rewards. (Plus it's pleasant to read and think sometimes, but not always. It's a lot of effort as well.) So this is one way. But it's a slow effect, and not strong enough to defeat some habits. It's inspiration + motivation + information, and over time there are effects.

Do you know of a particular example of an infographic that worked on people? I.e. made them choose the LL option more often?

All this sounds, still, as form of education :)

Remember we had a discussion about change, and you said there were 2 phases: 1. the "wow" moment, when someone becomes aware of a phenomenon or rule he didn't know about (often enough to trigger change) 2. the "how" phase when someone gets specific advice and help with implementing the rule or embracing the phenomenon.

What you seem to be saying is that infographics, type 1 tool, could help with shifting preferences towards LL?

[Michal Glomba]

Yes, I believe that the "wow" moment is indeed needed to trigger any somehow troublesome change in you. It needs to be bold enough to redefine the way you think about something by showing you the right path without leaving any doubts. And yes, then the "how" phase comes but well, once you are motivated you will find your way through.

I agree that talks, stories, presentations, books and any form of sharing views may trigger a change in you but that unfortunately: a) it is not a technology by traditional means, b) the idea is commonly enough dilluted in these media that the main point may get lost.

If we try to find a technology that may ignite this "wow" effect in people, the visualizations of factual data is something that really looks efficient to me. I have tried, and I am trying, playing with figures every time there is a financial decision to be made, typically to calculate the actual profit/loss factor. Think about planning spendings, deciding on investment options, calculating your market value in terms of professional career, etc. But this is frequently very easy as all you need to do is just do the math, and there are already numbers on the input side.

My point with infographics is about delivering a concise and well-thought summary of facts that will blow your mind - or at least help you realize some dependencies. You need to have a higher stimulus, an additional motivation to force yourself to stay working on longer-term profits and abandon easy rewards, otherwise it is always easier to just take the prize - unless you know there is something more important that will become available in the future. Like longer lifespan, better health, less chance in taking part in a car accident, etc.

The other great way of influencing people is telling stories - stories about real people. This is why I suggest that any raw factual data should be enriched by real stories, just to show that it's not a set of anonymous figure, but there is a story behind each. Otherwise it will be just blunt, boring stats. The combination of two: factual data with emotional enchrichments, looks like a perfect match to me - and it looks like a definition of specialized infographics, don't you think?

Edit: I have read this comment once again just to recap and I think there is one more point missing - the need of social proof. We all need to know that something hard is worth the effort because there are people that went through all that to achieve something great. There are really rare exceptions of people that go just blindly into unknown, most of us just need at least a part of the happy ending to be told first. How to connect this with the infographics tool? Well, I have no idea for the time being :). Probably the infographics may work fine as "type 1 tool" but enriching them with social proof would create a golden remedy.

Can you give a more direct example of a longer-term, difficult goal? Then we could try different ways to realize the importance of achieving this goal to people. I am just afraid that without narrowing the discussion to just a few cases we may drift away.