Abstract

MORENO OKUNO, Alejandro Tatsuo  and  AGUILERA NAVARRETE, Ma. Natividad. Psycological Distance. Econ: teor. práct [online]. 2017, n.46, pp.173-194. ISSN 2448-7481.  https://doi.org/10.24275/etypuam/ne/462017/moreno.

Several economists have explained the problems of intertemporal inconsistency and self-control through “present-bias.” Present-bias is the disproportional importance we give to the present over the future. However, we give more importance not only to the present, but to what we perceive as closer to us. In this article we generalize the concept of present-bias to include what it is known as “psychological distances.” Psychological distances include temporal and spatial distances. We propose a model in which individuals give more importance not only to what is closer in temporal distance, but to what is closer, for example, in spatial distance. This allows individuals to control their present-bias by moving closer to or away from temptations in any psychological distances other than the temporal distance.

Keywords : traditional exponential discount; present-bias; psychological distance.