Present bias.
In plain English
Present bias is the tendency to give too much weight to what you can have right now compared with a bigger payoff later, a pattern economists model as hyperbolic discounting. Laibson formalized it in 1997 to explain why people struggle to save even when they know they should. The now-versus-later tug is why a purchase today can beat a larger balance decades on, and why tools that lock money away, automatic transfers, retirement plans you have to opt out of, work: they take the choice out of the present moment where the bias is strongest.
01Why it matters
Present bias is a core reason saving for retirement is hard, so understanding it points to the fix, which is making the good long-term choice automatic rather than relying on willpower in the moment.
02The math, step by step
Offered 100 dollars today or 110 next week, many take the 100, but offered 100 in a year or 110 in a year and a week, most happily wait. The only difference is that one choice is immediate, which is present bias, and it is why automatic saving beats good intentions.
03What this is NOT
It is not a character flaw. Present bias is a predictable feature of how people weigh time, which is why the durable fix is structural, like automating savings, rather than simply trying harder to resist temptation each time.
04Receipts
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