Later, we will look at techniques to manage the impulsive elephant nature. Before we do that, we may want ask, ?Why bother? Why limit yourself? Why not just do what comes naturally? What?s wrong with, ?If it feels good, do it!?? Our elephant nature is not, after all, trying to kill us. It just wants to have fun. Or to feel good. Or to get revenge. Or to scream. Or to run away. But, whatever it wants, it wants it RIGHT NOW! It can be great to follow the impulsive, elephant side. But, not always. There are times when we don?t want to pay the costs for the elephant?s instant gratification. Sometimes, these choices lead to serious regret. It is those harmful decisions that we want to have the power to change. The elephant side is part of us. It isn?t going away and we wouldn?t want it to. But, the elephant side is only part of us. By learning how to ?train? that side of ourselves, we can learn how to avoid those areas that create the biggest problems. One common problem with blindly following the elephant?s desires is excessive future discounting. Future discounting is the economists? term for how much we care about the future. If you offer to give me $100 in a year, that has some value. But, it isn?t quite as valuable as if you handed me a $100 bill right now. So how valuable is that $100 in one year? In other words, how much would you give up in cash you could have right now in order to get $100 in a year? Your answer shows your rate of future discounting. Suppose I offered you $99 today or $100 in a year. If you chose to wait a year to get the $100 instead of taking the $99 right now, you have a low rate of future discounting. That is, you consider future money to be worth almost as much as current money. (It might also mean you hadn?t considered taking the $99 and investing it yourself!) Suppose that instead I offered you $50 today or $100 in a year. If you chose the $50 right now, you have a relatively high rate of future discounting. In the same way, a higher rate of future discounting makes you more likely to borrow money from a high interest credit card when shopping. Future discounting is not just about money. Future discounting applies to decisions we make in many areas. If you didn?t care about the future, would it change what you ate? Would it change how much you ate? Would you worry about getting fat? Would you care about the long term affects on your health? Think about your choices in exercise, education, drinking, or even sex. In all of these areas, we face tradeoffs between instant gratification and long-term outcomes. Risky sex pays off with immediate sensation, but could also cause many bad outcomes in the future. Skipping Reasons for dual-self decision training: Excessive future discounting class or dropping out of school may feel like freedom, but the long-term results can eliminate future opportunities. Listlessly watching television is relaxing, but becoming a permanent couch potato and getting no exercise will eventually create problems. The impulsive, elephant nature is defined by its disregard for the future. The elephant side cares little about what happens next year. Many economic models represent the elephant side as a decision-maker that lives only for one day (or less). The elephant side isn?t trying to kill us; it is just focused on the ?right now.? Unfortunately, that focus can leave us broke, in jail, obese, ignorant, hung over, diseased and dying! Future discounting is not only about avoiding bad choices. It is also a good indicator of future success. For example, planning for the future can predict future wealth accumulation. Economics professors at New York University found that a difference in the propensity to plan explained much of why similar households ended up with very different levels of wealth. 1 The tradeoff between immediate and future rewards is not just an issue for retirement planning. Researchers at Columbia University conducted tests that measured the ability of four-year-olds to delay gratification. For example, a child could choose between eating a snack that was in front of him (such as pretzels) and waiting fifteen minutes to receive a better snack (such as cookies). Others could eat the marshmallow in front of them or wait and receive two marshmallows. Some trade-offs used small toys or tokens. When following up on these preschool children years later, the researchers found, ?Those 4-year-old children who delayed gratification longer in certain laboratory situations developed into more cognitively and socially competent adolescents, achieving higher scholastic performance and coping better with frustration and stress.? 2 We will see later that managing the impulsive elephant nature is not just about ?willpower,? but is also about using techniques to consciously control focus. Similarly, children who were more successful at waiting directed their attention away from the immediate reward in front of them. Some covered their eyes; others sang or played games with their fingers and toes. In similar experiments, children were able to delay the longest when researchers told them to imagine eating some other kind of snack. For example, researchers told children waiting for marshmallows to ?think about the salty, crunchy taste of pretzels.? 1 With the elephant side thus distracted, the children were able to wait much longer, even in the presence of the immediate reward. Future discounting is important for attaining success and avoiding failure in a variety of areas of life. So, why don?t we just switch our future discounting rate and become more successful? The good news is that we can choose to change our rate of future discounting. Nobel Prize winning economist Gary Becker and his colleague Casey Mulligan presented evidence for a model where people could change their own time preference, but suggested that this change required significant effort. 3 In other words, it is possible to invest in developing future-orientation (patience). Unfortunately, it isn?t always quick or easy. While changing one?s future-orientation may not be instant, using methods that recognize the influence and nature of our elephant side can make it much easier. A bit later, we will consider some of these approaches. No doubt the potential differences in wealth, health, relationships, and every other area of life make this kind of ?elephant training? well worth the effort. 1 Ameriks, J., Caplin, A. (NYU), Leahy, J. (NYU). 2003. Wealth accumulation and the propensity to plan. Quarterly Journal of Economics, 118(3), 1007-1047. 2 Mischel, W. (Columbia), Shoda, Y. (Columbia), Rodriguez, M. (Columbia), 1989, Delay of gratification in children. Science, 244, 933-938. 3 G. Becker (Chicago) & C. Mulligan (Chicago), 1997, The endogenous determination of time preference. Quarterly Journal of Economics, 112(3), 729-758 faculty
Want to see the other 3 page(s) in 1.pdf?JOIN TODAY FOR FREE!