Temporal Discounting, or Why We Want Things NOW

Many decisions in our lives are intertemporal in nature. Should I study for an upcoming exam or watch another episode of my favorite show? Should I spend my money on a new car or add it to my retirement savings? To make this type of decision, people need to make a tradeoff between two rewards (or two losses)?one available immediately and the other at some point in the future. Considering this can help students understand how people make similar decisions, with ?intertemporal choice? defined as the need to decide between outcomes available at different points in time. In that context, this technical note introduces intertemporal discounting, explores how people reach different decisions when making tradeoffs between current and future outcomes, and presents the implications of intertemporal discounting for both their personal lives and managerial functions.