There is always tension between the future and the present.
Decisions are a function of time. If one could make all the arguments for and against a decision, it is expected that the action is taken when it will produce a favourable outcome.
However, making decisions isn’t as simple as listing the pros and cons. It includes consideration of time. Time spent making the decision, the time to take action, and time to receive feedback or results.
Time is the true cost of making decisions.
“Decisions in the real world are often time-sensitive — the sooner you act, the more value you realise from having acted (but often the precise amount of that value is also occluded by uncertainty). Most decision-making frameworks don’t take time selection into account, since there is no need to model time sensitivity in decision experiments. But in the real world, the utility of each choice may sometimes depend on the decisiveness with which you act on your analysis.”
“In other words, how quickly you act after coming to a decision is just as important as how you come to said decision.”
Confronted with a decision to act on something unpleasant now or in the future, we often kick the can down the lane - into the future. Maybe we are procrastinating. We assume our future self will be able to handle that. Our present self is tired, not motivated and sadly have other things to attend to. When the future comes, the future self we envision isn’t different from the present self because we are in the present. We can further kick the can down the lane again, but at a point in the future, we must take that action and face the unintended consequence of kicking it down the lane.
For the pleasant activities, we tend to opt to do the opposite. That means prioritising the present over the future. This is sometimes at an expense. This is instant gratification Vs delayed gratification.
In monetary terms, the present value and the future value of money.
A dollar today is worth more than a dollar in the future.
This means the money received in the present is worth more than the same amount of money received in the future. This concept is known as the present value (of money).
One of the reasons the am amount of money is worth more today than in the future is inflation. Another is the opportunity cost of not receiving the money in the present.
For human behaviours, however, we do what is known as temporal discounting. As explained in The Cambridge Handbook of Thinking and Reasoning.
A nontrivial task is to decide how much weight to give to outcomes extended into the distant future. Various forms of uncertainty (regarding nature, one's own tastes, and so on) justify some degree of discounting in calculating the present value of future goods. Thus, $1ooo received next year is typically worth less than $1ooo received today. As it turns out, observed discount rates tend to be unstable and often influenced by factores, such as the size of the good and its temporal distance, that not subsumed under standard normative analyses.
For example, although some people prefer an apple today over two apples tomorrow, virtually nobody prefers one apple in 30 days over two apples in 31 days (Thaler 1981). Because discount functions are non exponential (see also Loewenstein & Prelec, 1991), a 1-day delay has greater impact when that day is near than when it is far.
Similarly, when asked what amount of money in the future would be comparable to receiving a specified amount today, people require about $60 in 1 year to match $15 now, but they are satisfied with $4000 in a year in stead of $1000 today. This implies discount rates of 100% in the first case and of 3% in the second.
To the extent that one engages in a variety of transactions throughout time imposing wildly disparate discount s on smaller versus larger amount ignores the fact that numerous small amounts will eventually add up to be larger, yielding systematic inconsistency.
Excessive discounting turns into myopia, which is often observed in people's attitudes toward future outcomes (see, e.g. Elster, 1984; Elster & Loewenstein, 1992). Loewenstein and Thaler (1989) discussed a West Virginia experiment in which the high school dropout rate was reduced by one third when dropouts were threatened with the loss of their driving privileges. This immediate consequence apparently had a significantly greater impact than the far more serious but more distant socioeconomic implications of failing to graduate from high school.
These authors also mention physicians' typical lament that warning about the risk of skin cancer from excessive sun exposure has less effect than the warning that such exposure can cause large pores and acne. In fact, “quit smoking” campaigns have began to stress the immediate benefits of quitting (quick reduction in the chance of a heart attack, improved ability to taste foods within 2 days, and such) even more prominently than the long-term benefits (American Lung Association, 2003).Similar reasoning applies in the context of promoting safe sex practices and medical self-examinations, where immediate gratification or discomfort often trumps much greate/but temporally distant, considerations. Schelling (1980, (1984) thought about similar issues of self control in the face of immediate temptation as involving multiple “selves”, it is to related considerations of alternate frames of mind[sic]