General preference for short term rewards as against deferred payoff is well known. We have already seen it from the tests done by Prof. Frederick. Subject’s selection for $100 now vs $140 a year later, 30 min massage in 2 weeks vs 45 min massage in November, $3400 this month vs $3800 next month; the list is endless.
The individuals who go for immediate rewards undervalue prizes that are achievable some time in future. Put it differently, they discount the value of the future payoff higher (if it’s money, higher than what is practically achievable from the market) and wait for increasing the benefit until it meets their criteria. The phenomenon is known as temporal discounting. In other words, people with high values of temporal discounting possess myopic discounting.
A study published in The Journal of Neuroscience (2010) used subjects with lesions in their prefrontal cortex to establish the role of the brain in discounting behaviour. Participants included 16 people with brain damage and 20 healthy, as evidenced by MRI and CT images of their brain.
The subjects were given various temporal discounting tasks involving fictitious incentives of money, food, vouchers etc. The results showed a remarkable difference between healthy subjects and the non-healthy. A higher discounting committed by people who damaged their medial orbitofrontal cortex (mOFC) of the brain suggests the importance of mOFC in having clarity about future outcomes in decision making.
Sellitto et al. The Journal of Neuroscience, December 8, 2010, 30(49):16429 –16436.
