Question

Discuss the impact of hyperbolic discounting on food consumption or on the consumption of other limited resources.

Answer 1

Hyperbolic discount is the phenomenon when our brain rewards something more when we get it instantly. For example, credit cards let us buy things right now and we will have to pay for them later with interest rates. Our brains value the rewards of buying something right now rather than saving for it and then buying and hence we buy something despite knowing that we will pay more for it. It is called 'hyperbolic' discount because the amount by which we 'discount' the future choice reduces as the time of reward goes farther. If plotted, it looks like a hyperbola and hence its called 'Hyperbolic discounting'.

This has devastating effect on limited resources. Lets consider environment. It is, after all, a limited resource. We have limited amount of fresh water, limited time to repair our environment, limited amount of natural resources etc. We know all of this. We also know that if we want to have the environment as clean and useful tomorrow as it is today, we must take some necessary steps. We must reduce our consumption of things which increase our carbon footprint. We must pass laws against pollution, which in all probability will increase the price of many things right now. We must use less vehicles, eat less meat, plant more trees, use less plastic, use less tissue paper, use less fuel and electricity. The list goes on. The theme behind all of these is this only that we will have to sacrifice our now to save our future. We know this rationally. Yet, we find this is very hard to do. Often people will forego these to save a few dollars or to have the reward right now. This exhausts our limited natural resources even more quickly than what we know is prudent.

Thus, we can say that hyperbolic discounting has negative effects on the consumption of any limited resource.