Intertemporal choice
Trading off costs and benefits that arrive at different points in time.
What it means
Intertemporal choice is the study of decisions whose consequences are distributed over time — such as saving, dieting, studying, exercising, and investing — where the interests of the present self and future selves frequently conflict. The classical benchmark is the discounted-utility model, in which a single constant rate discounts all future payoffs exponentially, implying preferences that stay consistent over time. Real behavior departs from this benchmark in systematic ways: discounting is steeper for near-term than distant delays (hyperbolic in shape), rates differ for gains versus losses and for small versus large amounts, and visceral states and emotions intrude, so the tidy single-rate picture fails descriptively. These departures are not mere noise — they generate present bias, time inconsistency, and the demand for commitment devices that bind a future self expected to misbehave. It matters because most consequential life outcomes, from financial security to health, hinge on intertemporal trade-offs, making this the conceptual home for understanding self-control, procrastination, and the policies designed to help people act on their long-run interests.
Examples
Deciding whether to take $100 today or $120 in a month, or whether to spend now or contribute to a pension, is an intertemporal choice.
Choosing between a lie-in and a six o'clock run trades a certain comfort now against a fitness benefit that arrives months later — the same shape as any savings decision.
A dentist's advice to floss nightly asks for a small cost every evening in exchange for pain avoided decades away, which is why so few people take the deal.
First described in Discounted-utility model: Paul Samuelson (1937).