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Are You a Hyperbolic Discounter?

Posted by on November 18th, 2013 Posted in: Training Tips


Julie Dirksen, an Instructional Designer, recently wrote a blog post for the e-Learning Leadership blog called: An e-Learning Challenge – Why Should You Care Right Now? She explains hyperbolic discounting this way: “Behavioral economists study the concept of hyperbolic discounting, which is our tendency to prefer rewards that come sooner over rewards that happen later, even when the later reward is somewhat larger.”

How would you answer these 3 questions:
1. Would you rather have $10 today, or $11 tomorrow?
2. Would you rather have $10 today, or $11 in a year?
3. Would you rather have $10 today, or $1000 in a year?

According to Dirksen, responses are generally the same. Half the people are split on question #1, everybody wants the money from question #2 today, and everyone is willing to wait for the money in question #3.

What are the implications for training?
Julie’s personal example hits the nail on the head. She attended a training event about Health Savings Accounts (HSA). HSAs let you set aside pre-tax dollars from your paycheck to use for allowable medical expenses. She said it was the most boring training she had ever attended (possible hyperbole). She described the training as one where they told her everything she needed to know so that she could use her HSA at some point in the future…if she had the need. How fulfilling is that? Not very.

Now, think about what the 3 questions told us about human behavior (remember the $1000) and use that to design a scenario-based training where you build in some urgency, a reason to care. Julie’s suggestion for beefing up the HSA training was to give people the HSA guidelines, give them scenarios and ask them to figure out if they can use their HSA money. I’ve got to figure out if these medical expenses are qualified and use the money before the end of the year (sense of urgency)! This gives the learner a reason to pay attention and a reason to use the information. Sounds like a win-win situation. Now, I’ll take that $1000 today please.

You can read the entire post here: http://ow.ly/qVEgi 

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