Temporal ChoiceHigh Impact
Present Bias
Definition
Present Bias is the inclination to undervalue future rewards in favor of immediate, smaller gratification.
Real-world examples
Opting for a chocolate bar today instead of a healthier body in six months, or postponing retirement savings because of current spending desires.
- Signing up for a gym in January but skipping workouts all year — the distant benefit loses to today's comfort.
- 'Buy now, pay later' feels painless because the cost is pushed onto a future self that seems like a different person.
How to design for it (nudge strategy)
Implement 'Save More Tomorrow' mechanisms where commitments are made for the future, or provide small, immediate rewards for actions with long-term benefits.
The evidence (1)
- Overcoming Saving Inertia with Future Commitments
Finance · Average Retirement Saving Rate: 3.5% → 13.6% (+10.1 pts) · n = 3 companies, 1,200 employees
Key research
- Intertemporal ChoiceKeith Marzilli Ericson, David Laibson · Handbook of Behavioral Economics / NBER (2018)
- Save More Tomorrow™: Using Behavioral Economics to Increase Employee SavingRichard H. Thaler, Shlomo Benartzi · Journal of Political Economy (2004)
- Working Over Time: Dynamic Inconsistency in Real Effort TasksNed Augenblick, Muriel Niederle, Charles Sprenger · The Quarterly Journal of Economics / NBER (2015)
Related biases
Cite this page
Behavioral Economics Lab. "Present Bias – Definition, Examples & Evidence." Behavioral Economics Lab, https://behavioraleconomicslab.com/biases/present-bias.