Why Time Discounting Could Be the Key to Your Financial Success

Business is more about how people act than you might think. Behavioral economics is a field of study that was started and led by Richard Thaler, who looked at how human behavior affects economics. People sometimes make choices that are not logical from an economic point of view. So, Thaler thought that it was important to study how the way people act affects traditional economics.
The value of a gift tends to change over time, depending on how long you have to wait before you can get it. This is called "time discounting."
In the area of behavioral economics, people study how the way people act affects the economy in ways that don't match up with what classical economic theory says should happen. When it comes to financial decisions, there isn't always a clear answer. This is because people don't always act in the same way.
Some workers at a company, for example, are much more motivated by immediate rewards than by future rewards, even if the future rewards are more valuable. So, the theory takes into account that people tend to be restless, but it also takes into account that the right incentives can make some people prefer to wait longer. If you don't understand what's going on, it's okay. The next case will help clear things up a bit.
Time Discounting in Action
Recall the famous saying from Popeye, “I’ll gladly pay you Tuesday for a hamburger today.” What does this have anything to do with?
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Content Creator: 📝 Aysun Ibadova, Kamran Tagiyev
Voiceover author: 🎙️ Jeremy G.
Animation author: 🎨 Nazanin Suleymanova
Sound editor: 🔊Aysun Ibadova
Project manager: 📊 Kamran Tagiyev

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