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Time Preferences and Life's Curve Balls
632 sats \ 9 comments \ @freebookspls 17 May culture
https://m.stacker.news/31385
So, I am reading more about time preferences and how they impact people and societies. Most of what I read seems to be based on the assumption that everybody is between the two extremes of high and low time preferences.
Recalling my recent experiences, some of lifes situations put me on a different headspace and I think they changed my time preferences temporarily.
I don't usually go on shopping sprees and I have my spending under control. But when I'm sick or travelling I dont pay much attention to price tags. I don't mind buying games at a higher price when all I got to do is killing time while healing, for example. I also don't care saving much money on meals when travelling.
Bare in mind I travel with a budget well defined and I have a rainy day fund I get money from when something extraordinary happens.
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93 sats \ 4 replies \ @Undisciplined 17 May
These are good thoughts.
I think we contrast high and low time preference behaviors for the sake of illustrating points, when the reality is there's something like a normal distribution of time-preferences throughout the population.
Part of what you're getting at here is a distinction that some economists like to make about seemingly identical goods. A bottle of water in a desert is not the same good as a bottle of water near a clean mountain stream. An economic good isn't just the physical item, but also the circumstances surrounding the item.
Not all economists make this distinction, by the way, but it's an interesting perspective that I think has merit.
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42 sats \ 3 replies \ @cryotosensei 18 May
Another example would be sats earned through referrals vs sats grinded through V4V. Free sats just hits differently.
Why don’t some economists make this distinction, though? Because rationally speaking, we should just examine the features n attributes of the good itself?
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21 sats \ 2 replies \ @Undisciplined 18 May
we should just examine the features n attributes of the good itself
Basically this. There are really esoteric philosophical reasons for taking one of these views over the other.
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42 sats \ 1 reply \ @cryotosensei 18 May
How do they account for the irrationality of the human mind, then?
For example, I might choose high time preference n splurge on a more expensive gift card with my free sats. whereas check out the price a couple of times before I commit to buying a gift card with the sats I earn through blood sweat n tears haha
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0 sats \ 0 replies \ @Undisciplined 18 May
That's not handled well by the mainstream of the profession. Although, behavioralists would probably say that you're using simple heuristic rules to reduce the complexity of your personal finance problem.
The Austrian tradition allows for you to view your free sats as a different good than your earned sats, similar to the example I gave with water.
There are only a few strict rationality assumptions that are fundamental to economic theory. We basically just require that people can state which thing they prefer when presented with two options.
Some particular theoretical results may rest on other simplifying assumptions. For example, if you view A>B and B>C, then you must view A>C.
I think people are often surprised at how minimal the assumptions in economics really are.
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31 sats \ 0 replies \ @Satosora 17 May
To tell you the truth, I have never worried about finances. I just dont spend money, and save what I can. Not having a complex life helps a lot.
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21 sats \ 1 reply \ @cristaiji 17 May
I learnt about time preferences from Saifdean Ammous and The Bitcoin Standard book.
My basic understanding is that firstly we need to develop a degree of self discipline around spending habits. Learning to save, delay gratification etc.
Secondly it's the ability to develop the emotional calm to ride the volatility and bear markets inherent to bitcoin. In other words not to panic when BTC has a dip.
And then lastly to be able to think long term about bitcoin - perhaps 10 or 20 years into the future.
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0 sats \ 0 replies \ @cryotosensei 18 May
I love how concise, yet comprehensive your answer is 👍. Much food for thought.
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0 sats \ 0 replies \ @cryotosensei 18 May
Great questions.
While I don’t have any book recommendations, I think one’s default towards high time-preference things becomes pronounced when he becomes a parent. Suddenly, time is a more valuable currency than money. My wife and I invested in some time-saving technologies, such as a dishwasher. We discarded a perfectly functioning washing machine to buy a washing machine-cum-dryer.
N no matter how expensive plane tickets get, we select the option that is the most time-efficient n energy-saving
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