What is present bias?
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The Bias: Why is it hard to save for retirement?
We overweight rewards now versus later. Present bias makes future benefits feel small. Source: Wikipedia – Hyperbolic discounting
Where It Shows Up: Where does it show up?
Procrastination, snacking, skipping the gym. Immediate rewards win in the moment. Source: Wikipedia – Hyperbolic discounting
The Fix: Fix?
Commit in advance, like automatic savings. 'Save More Tomorrow' plans commit future raises to savings. In the original study, participants' savings rates rose from about 3.5% to 13.6% in under four years. Source: Thaler & Benartzi – Save More Tomorrow (JPE, 2004)