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Present bias

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Present Bias

Present bias is a cognitive bias that causes people to give greater weight to the present moment when making decisions. It is a form of temporal discounting, which is the tendency to prefer smaller, immediate rewards over larger, delayed rewards. Present bias is a common phenomenon in economics, psychology, and other fields, and it can have a significant impact on decision-making.

History of Present Bias

The concept of present bias was first introduced by economist Richard Thaler in his 1981 paper β€œSome Empirical Evidence on Dynamic Inconsistency.” In this paper, Thaler argued that people often make decisions that are inconsistent with their long-term goals, due to the fact that they give greater weight to the present moment. Since then, the concept of present bias has been studied extensively in economics, psychology, and other fields.

Comparison Table

Reward Immediate Delayed
Weight High Low

Summary

Present bias is a cognitive bias that causes people to give greater weight to the present moment when making decisions. It is a form of temporal discounting, which is the tendency to prefer smaller, immediate rewards over larger, delayed rewards. Present bias is a common phenomenon in economics, psychology, and other fields, and it can have a significant impact on decision-making. For more information about present bias, you can visit websites such as Investopedia, The Balance, and Psychology Today.

See Also

  • Temporal Discounting
  • Hyperbolic Discounting
  • Delayed Gratification
  • Risk Aversion
  • Opportunity Cost
  • Time Preference
  • Procrastination
  • Impulse Control
  • Cognitive Bias
  • Behavioral Economics

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