Hyperbolic Discounting
A smaller reward now beats a larger reward later.
What it is
People discount the future steeply and inconsistently. $50 today is preferred to $60 next month, though $50 in a year versus $60 in thirteen months flips the other way. Anything that moves the benefit closer to the moment of decision, or the cost further from it, changes what people choose.
The research
Choices between rewards at different delays follow a hyperbolic curve, producing preference reversals as the nearer reward approaches.
Ainslie, 1975
How to use it
Deliver something immediately
An instant result, download or confirmation makes the purchase feel rewarded now, not in thirty days.
Push the cost out
Deferred billing, a free first month or "pay after the job" moves the loss into the discounted future.
Related
Sources that shaped this entry: growth.design, Kolenda.io.