Present Bias

What is it?

Present bias (closely related to hyperbolic discounting) is the tendency to weight present payoffs more heavily than future ones when making intertemporal choices. While related to hyperbolic discounting, present bias focuses specifically on the extra weight given to "now" versus "later," regardless of how much later. This creates systematic under-investment in the future: we procrastinate on tasks with delayed benefits, undersave for retirement, skip exercise for immediate comfort, and choose immediate pleasures over long-term goals. Present bias explains why people often fail to follow through on plans their past selves made: the "planner" self that committed to healthy eating or regular exercise loses out to the "doer" self that wants immediate gratification. Behavioral economists have developed interventions leveraging commitment devices (making it costly to deviate from planned behavior), automatic enrollment (making future-oriented choices the default), and making future rewards more vivid and concrete. Understanding present bias is crucial for designing systems that help people achieve their long-term goals despite their present-focused impulses—from retirement savings programs to health interventions to environmental policies.