── ── Mental model
Hyperbolic Discounting
People discount the near future far more steeply than the distant future, producing dynamically inconsistent preferences: patient choices for next month reverse when next month arrives. Formalized by Laibson's 1997 β-δ model: any future outcome is shrunk by β ≈ 0.7 relative to the present, then discounted exponentially. The fix is structural: commitment devices that bind the future-impatient self —…
How it works
Step 1 — Identify the reversal: intended behavior / actual behavior / repetition count / cost of gap.
Step 2 — Map asymmetry: immediate cost of desired vs immediate benefit of undesired vs delayed benefit of desired vs delayed cost of undesired.
Step 3 — Diagnose β: unaided success rate. If < 30%, internal correction is unlikely — install commitment device.
When to use it
- user says 'I'll start tomorrow / next week / next month' repeatedly
- someone intends to save / exercise / quit but never follows through
- a product's free trial or subscription is creating unexpected lock-in
- someone wants to design a commitment device or pre-commitment contract
- a team keeps deferring long-horizon work for short-term fires
When not to use it
When the decision is routine and reversible, applying a formal method costs more than it returns.
Worked example
David Laibson's "Golden Eggs and Hyperbolic Discounting," 1997
David Laibson's 1997 paper at Harvard was the formal economics breakthrough that turned a behavioral curiosity (the documented preference reversal in psychology) into a tractable mathematical framework with policy implications. The paper title "Golden Eggs" referred to retirement accounts as illiquid savings devices that bind the future-self.
Install this skill (free, MIT)
npx skills add deciqAI/knowledge-skills