What Part Of V = A / (1+kD) Don't You Understand?
May 16, 2022•34 min•Season 1Ep. 9
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Episode description
Humans are terrible at estimating the value of future events & experiences. When a payoff is in the future, we especially undervalue that payoff. Most of us will take a lesser payout today versus a higher payout in the future (think, instant gratification)
Behavioral Economists have developed a way to model and explain this behavior, called Hyperbolic Discounting. It's complex, yet fascinating math. Below are a few links to help you learn more if you'd like
https://www.youtube.com/watch?v=6p0J6gFwQ1c&feature=youtu.be
https://dash.harvard.edu/bitstream/handle/1/4481499/Laibson_GoldenEggs.pdf
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