Hyperbolic Discounting, Collective Moments & More

Author

Alex Brogan
August 09, 2023 • Read Time: 7 minutes

 

Good Morning. Welcome to all the new readers of Faster Than Normal who have joined us since last week!

Here’s what we’ll cover today:

Mental Model: Hyperbolic Discounting.

Insight: Collective Moments.

Quote: Ideas Transcend Talk.

Question: Embrace Growth.

Parable: The Businessman and The Greek Fisherman.

Cheers,
Alex

Hire your next top performer in 5 days or less with Athyna.

Discover a new way of scaling your team. Athyna bridges the gap between extraordinary talent and exciting opportunities, giving your business access to a pool of world-class professionals. Build your dream team with ease, and forget about the hassle and complexities of traditional global hiring.

  • Athyna handpicks from 70,000+ talents to meet your needs.

  • Save up to 67% compared to local hiring costs.

  • No search fees. No activation fees.

  • Pay nothing until you find the perfect match.

Ready to find your dream team (for way less time and money)?

| Mental Model

Hyperbolic Discounting

Imagine standing at the fork of a forest trail. One path leads to a pretty little grove just a short walk away. The other path, though longer and steeper, culminates in a breathtaking mountaintop view. You're caught in a classic instance of Hyperbolic Discounting: the choice between an immediate, easier reward and a delayed, but significantly more satisfying one.

Hyperbolic Discounting is a cognitive bias where we prefer immediate payoffs to delayed, albeit greater rewards. This concept helps explain why we often engage in behaviors that are not in our long-term best interest. It's the force that pulls us towards the cookie jar when we've committed to a diet or keeps us scrolling social media when we've planned to read a book. In essence, it is the reason why bad habits are easy to form and good ones aren't.

Consider this example. Suppose you're trying to save for a dream vacation. You have the option to buy a pricey gadget now, which provides instant gratification, or to save that money for your trip, which provides delayed but potentially more meaningful satisfaction. Your mind is pulled towards the immediate reward, but by resisting this urge and focusing on the future gain, you can navigate the situation in your best long-term interest.

As Simon Sinek said, "Working hard for something we don't care about is called stress; working hard for something we love is called passion." This reminds us that the key to overcoming hyperbolic discounting is not just delaying gratification, but finding value and pleasure in the process that leads to a delayed reward.

Ultimately, the path to success often requires us to challenge our natural preference for immediacy. It involves recognizing our inclination for the here and now and consciously choosing to focus on long-term goals. It's about training our mind to not just endure but also appreciate the longer, steeper path, because it's at the top of that climb where we'll find the most rewarding views.

| Insight

The most meaningful memories are often created through shared experiences.

Challenge: Plan a memorable experience to share with a loved one, focusing on connection and quality time.

Example: Organize a weekend camping trip or a special at-home movie night with your family.

| Quote

Susan Cain, an author and introvert advocate, on the strengths of introverts:

"There is zero correlation between being the best talker and having the best ideas."

| Question

Am I holding on to something that I need to let go of, in order to grow?

A Parable I Enjoyed

The Businessman and The Greek Fisherman

A businessman took a short vacation to a small Greek coastal village. Unable to sleep he walked the pier. A small boat with just one fisherman had docked and inside the boat were several large tuna.

“How long did it take you to catch them?” he asked.

“Only a little while” the Greek fisherman replied.

“Why don’t you stay out longer and catch more fish?” he asked.

“I have enough to support my family and give a few to friends,” the Greek fisherman said as he unloaded them into a basket.

“But …. What do you do with the rest of your time?”

The fisherman looked up and smiled” I sleep late, fish a little, play with my children, take a nap with my wife and stroll into the village, where I sip wine and play guitar with my friends”.

The businessman laughed “Sir I am an MBA and can help you. You should fish more, and with the proceeds buy a bigger boat. In no time you could have several boats with the increase haul. Eventually you would have a fleet of fishing boats. Then instead of selling your catch to the middleman, you could sell directly to the consumers. You could control the product, processing, and distribution. You would need to leave this small coastal village and move to the city to run your expanding empire.”

The fisherman asked “But, sir, how long will all this take?”

“15-20 years, 25 tops” said the businessman.

“But what then?” asked the fisherman.

The businessman laughed and said “That’s the best part, when the time is right, you would announce an IPO and sell your company stock to the public and become very rich. You would make millions”.

“Millions? Then what?” asked the fisherman.

The businessman replied, “Then you could retire and move to a small coastal fishing village, where you could sleep late, fish a little, play with your kids, take a nap with your wife, and stroll to the village in the evenings where you could sip wine and play guitar with your friends.”

Source: Unknown

Have a wonderful Wednesday, all.

Until next time,

Alex

| P.S. — My Weekly Picks