Definition
Discounting is the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs. Hyperbolic discounting leads to choices that are inconsistent over time.
Classification reasoning
Hyperbolic discounting is based on the principle of least effort (choosing the path of least resistance). In time boxed environments, strategic decisions are generally aimed at making a decision which results in an immediate pay off.
Example
CMS versus hand coding websites: CMSs such as Wordpress, Drupal etc. provide a speedy way of implementing websites. Coding websites using websites on the other hand requires considerably more time but offers benefits in terms of being more customizable.
Impact
A website can be developed in relatively less time using a CMS. However, development of future features will be feasible if they do not require a high degree of customization.
Debiasing techniques
Be mindful of future requirements when making a decision. Verify thoroughly if the option which results in quick pay offs is able to handle more complex requirements in the future.
Related biases
- Inconsistency