A significant body of research demonstrate that people prefer 'smaller, earlier' payoffs to 'bigger, later' returns when the smaller payoffs are at hand, i.e. when the 'earlier' of the 'smaller' is quite close to 'right now'. But when both returns are distant later on, individuals have a tendency to prefer the bigger payoff, although the time lag from the smaller to the larger settlement would be the same. Something, to put it differently, somewhere makes folks 'switch' their preferences.
The author asserts that this human inclination - called Hyperbolic Discounting - is equally common in senior management teams, and that it shows itself in various types of conduct, including 'itches', habits, delusions, sellouts and 'Utopian dystopias'.
The Strategic Management of Irrationality Case Study Solution
PUBLICATION DATE: January 01, 2010 PRODUCT #: ROT104-HCB-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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