From Harvard Magazine:
Wimpy, Popeye’s portly friend with a voracious appetite but small exchequer, made famous the line, "I’ll gladly pay you Tuesday for a hamburger today." Wimpy nicely exemplifies the problems of ‘intertemporal choice’ that intrigue behavioural economists like David Laibson. "There’s a fundamental tension, in humans between seizing available rewards in the present, and being patient for rewards in the future," he says. "It’s radically important. People very robustly want instant gratification right now, and want to be patient in the future. Now we want chocolate, cigarettes, and a trashy movie. In the future, we want to eat fruit, to quit smoking, and to watch Bergman films."
Laibson can sketch a formal model that describes this dynamic. Consider a project like starting an exercise programme, which entails, say, an immediate cost of six units of value, but will produce a delayed benefit of eight units. That’s a net gain of two units, "but it ignores the human tendency to devalue the future", Laibson says.
If future events have perhaps half the value of present ones, then the eight units become only four, and starting an exercise programme today means a net loss of two units (six minus four). So we don’t want to start exercising today. On the other hand, starting tomorrow devalues both the cost and the benefit by half (to three and four units, respectively), resulting in a net gain of one unit from exercising. Hence, everyone is enthusiastic about going to the gym tomorrow.
"People act irrationally in that they overly discount the future," says Bazerman. "We do worse in life because we spend too much for what we want now at the expense of what we want in the future. People buy things they can’t afford on a credit card, and as a result they get to buy less over the course of their lifetimes."
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