<- Product Newsletter /

#78 - What is Hyperbolic Discounting?

Author face
Article written by
Juan Jesús Millo

How to overcome the hyperbolic discount

Let's imagine a scenario where you win the lottery, and when you withdraw the money you are offered two possibilities, one being the total amount of the prize, around 10 million euros, or receiving around 200,000 euros every year. If you are 25 years old, which would you choose? The vast majority of people would prefer to receive the 10 million immediately, why does this happen?

The reason for this is that we prefer an immediate reward to a reward in the future, even if it is of lesser value, this is hyperbolic discounting.

This cognitive bias encourages impulsivity and the immediate reward over a higher value reward. Obviously, this impulsivity in one way or another affects us negatively either as individuals or as a collective; do we prefer the dopamine from a cigarette or the long-term effects?

Hyperbolic discount definition

The human being prefers options that are safe in the moment, as nobody assures us that in the long term it will change our life or our perception, so we would have to calculate all these possibilities at the moment of decision making, so, as I have repeated a thousand times, our brain is very lazy, we go for the "safe option".

All this happens because the further away the reward is, the more its value is diluted, and this is very important, in a non-linear way. Our perception of time is non-linear, especially at times when we know we are going to have a short-term reward, that term will be infinite in our perception because it is something we really want, thus reinforcing this bias.

The ways in which this bias can materialise within a digital product are free trial subscriptions (the user gets the product instantly, regardless of how much they have to pay in the future), buy now pay later pricing moderls, or the inclination to pay small monthly subscriptions instead of a much larger annual one (but more profitable in the short-medium term).


Startup Nocode Website Builder

Create websites online using the Startup Bootstrap builder. It’s a fast and easy way to get your business online with pre-designed blocks.


An extension for automating your browser by connecting blocks. From auto-fill forms, doing a repetitive task, taking a screenshot, to scraping data of the website, it's up to you what you want to do with this extension. And you also can schedule when the automation will execute.

Microsoft Loop

Think, plan, and create - together. Microsoft Loop is a new app that combines a powerful and flexible canvas with portable components that move freely and stay in sync across applications.


Transcribe Google Meet & Zoom. The most flexible meeting productivity tool for the hybrid work era. Empower teams to have meetings in the most engaging, efficient, and enjoyable way possible.


Embed Forms Everywhere. Transform any form or survey into engaging web widgets. Gather customer feedback fast and efficiently, with a complete forms builder.

Maze Question Bank

Introducing Maze's Question Bank: 350+ research questions for you to use. The Maze Question Bank is a Notion database template compiling 350+ ready-to-use questions for rapid research and testing.

Jam for Chrome

Leave comments right from the page. Jam lets you give lightning-fast feedback on live websites without the frustration of screenshots.

Articles & Ideas

How to (properly) break your design system

In the early days of my career in digital product design, I saw a lot of designers around me getting frustrated. They saw themselves as artists, as creators. As if design was about channeling a higher force to generate ideas — that may or may not see the light of day. Fabricio Teixeira

The Current State of Checkout UX (18 Common Pitfalls)

After e-commerce sites have invested vast resources in “first in mind” strategies, Pay Per Click campaigns, beautifully crafted homepage imagery, perfect category taxonomies, faceted search logic, etc., it seems almost unbearable that 69% of users choose to abandon their purchase Edward Scott

Understanding the gender spectrum

It helps trying to see gender as some sort of a spectrum rather than a binary thing. Most people live somewhere on the edges of that spectrum, as men and women, usually on the side that correlates with their assigned sex at birth. Kitty Giraudel

The Golden Ratio and User-Interface Design

Although traditionally used in art and architecture, the golden ratio can be referenced to design aesthetically pleasing interfaces. Kelley Gordon

How Many Participants for a UX Interview?

In the early stages of a UX-design project, recruit enough people to gain an in-depth understanding of users’ experiences and needs. The number of people needed for an interview study is often smaller than you think. Maria Rosala

DesignOps 101: Guide to Design Operations

Learn all about DesignOps, how it affects the organization, and what's the best way to start with design operations, with expert insights on impact of DesignOps, its importance, and many more. UXPin

How to Build a compelling UX Research Roadmap

Research roadmaps can be one of the most valuable assets for a UX researcher. They help you gain alignment and communicate your priorities, plan your studies with ease, and maintain sight of the big picture. Nora Pekker

Remote Jobs

All remote jobs links have been removed, as the positions were fulfilled.