You’re a smart person, right?
And like a smart, rational person, you know what’s best for you. You take all the information available into account and make the decisions based on that information that will benefit you the most in the long term, right?
Well, you’re wrong!
I hate to break it to you, but you aren’t nearly as rational as you think you are!
Nor are any of your friends.
Nor is anyone you look up to.
Nor am I.
The truth is this:
Not only is every single person prone to making mistakes in our thinking. These thinking errors aren’t random, but rather they are systematic errors that are universal. In psychology, we call these systematic errors cognitive biases. These biases can lead to us making bad decisions, often without being aware of them!
And that’s why, I’m creating a series on cognitive biases, starting with the present bias in this article.
How Does Our Brain Work?
Before I can talk about the present bias, or really any cognitive bias, it is important that you understand the basics of how your brain works.
So let’s get into that:
For this we’re going back to prehistoric times.
Back then, our brains didn’t have the thinking capabilities that we have today. Our brains have evolved from more primitive animals. We still use this part of the brain every single day. We often like to call this the “reptilian brain“. It’s the part of the brain that’s responsible for quick instincts, gut feelings and things like that.
If you want to learn more about this, I recommend Thinking Fast and Slow by Daniel Kahneman.
How the Reptilian Brain Works
This part of your brain is limited in its capabilities.
The main functions of this part of your brain are simply survival and reproduction.
As you can imagine, in ancient times, there was a lot of danger. So in order to survive the reptilian brain uses simple thinking patterns. From all the information you get from your 5 senses, your brain deletes, generalizes and distorts the information, because it would be way too overwhelming otherwise.
Imagine you’re a caveman walking through a forest, and see a snake on the ground right in front of you. As a reflex you jump backward and look more closely at the snake to see if it’s going to attack. About a second or two later, you realize that it wasn’t a snake after all, but a long wiggly branch.
So, what happened here?
The shape of the branch resembled that of a snake and was distorted and generalized. This allowed for the quick reflex. Imagine if you had to take the 2 seconds to analyse the possible snake. In those seconds, the snake could have attacked resulting in injury or possibly death.
Here’s an old (but good) TED talk on our irrational behavior:
A Few More Examples of The Reptilian Brain
The reptilian brain (or lizard brain) works without any effort.
Without it, literally everything you see, think, and do would take conscious effort to think about. Without it, you would need to actually remember to breathe constantly. You would not have any instincts or gut feelings that can keep you out of dangerous situations and many more things.
Imagine that every time you see a car, you have to relearn it’s a car. Just because it’s a different model or color. Or that you need to stop for a moment to rationally deduct that the willow you’re seeing is a tree. Instead, they get generalized so you instantly know what things are, even when they look a bit different in shape, size or color.
Without the reptilian brain, life would literally be unmanageable!
The Other Part of Our Brain
We definitely can’t live without the reptilian brain.
However, our society and the tasks we need to do on a daily basis have gotten more complex. For that reason, these simple deductions and intuitions simply won’t do. They are too primitive for many of the situations we find ourselves in.
Luckily we have our Neo Cortex.
This is the part of your brain you use to think rationally. For example when doing math problems, thinking about different dilemmas or doing tasks for your job. A quick idea about a math problem, or dilemma won’t get you a high mark anytime soon.
But there’s a problem here as well.
Applying this kind of thinking takes time, it’s not nearly as fast as the lizard brain. Additionally, it costs quite a bit of energy. That’s the reason why you’re often feeling tired after studying for a few hours or after a long day at work. You’re capable of tackling complicated issues, but it comes at a high cost.
The Source of Cognitive Biases
It’s not that you’re dumb or unintelligent.
Cognitive biases like the present bias, endowment effect, and confirmation bias exist for two reasons. Firstly, our reptilian brain makes some systematic mistakes. On top of that, checking the output of the reptilian brain for all situations takes up way too much thinking capacity of our ration brain, the neocortex.
Don’t get me wrong, these 2 thinking systems work great most of the time.
However there are some instances where it fails, leading to sub-optimal outcomes and decisions. The first step towards guarding yourself against any cognitive bias is to be aware that it exists, because most people aren’t. Unless you’re aware, you can’t do anything about it.
Which is why I spent so much time explaining how your mind works.
Now let’s look into the present bias specifically.
What is the Present Bias?
Here’s my definition of the present bias:
The present bias is a systematic reasoning error where a person is focused too much on the present. They attach too much value to what is pleasant right now while not properly taking into account the consequences for the future.
Let’s look at an example:
You probably know the importance of investing,
It has amazing benefits for the future, so you want to start investing. You decide that when your next paycheck comes in, you’ll set aside $500 to invest rather than spend it. However, when that paycheck comes, you give into temptation and use the money to spend that money on some accessories for your house.
That’s the present bias at work.
Let’s take a closer look:
At first, you’re thinking rationally about the future, you decide that investing will bring you greater benefits than spending the money on decorations. There is a clear ranking in your mind: Investing > Spending. Sounds simple enough, right?
However, when the paycheck comes, you are in the NOW.
The problem is that spending the money gives pleasure immediately, it feels good to get stuff you enjoy. Investing on the other hand is painful in a way, because it means you have less money to spend right now.
The benefits from investing are in the future, so you don’t properly take them into account.
See how that works?
In short this is what the present bias looks like:
Even when the actual benefits in the future might be bigger, the perceived value is lower because the future weighs less to someone affected by the present bias. It feels insignificant compared to the current moment.
Present Bias Examples
Let’s look at a few more examples, so that you really grasp the concept.
One of the most common cases of the present bias is in procrastination. You’re not stupid. You know that it is better to do a nasty task sooner rather than later. Otherwise the work piles up, or you put yourself under way more stress than is needed. You know all of that.
And yet, you somehow find yourself watching Netflix instead.
Again, you know what’s best, and you’re sure that future you will do exactly what’s in your best interest. However, right now it feels so much better to just unwind with watching your favorite show rather than doing the thing that you know you should be doing.
Here’s an experiment that has been done many times with similar results:
When people are given the choice between getting $100 in 3 months or getting $110 in 4 months, most people choose the latter option. They decide that the $10 extra is worth waiting a month for, which sounds reasonable because you’re essentially getting 10% interest in a single month.
However, in a different setting, something funny happens:
When you give people the choice between getting $110 in 1 month or getting the $100 right now, most people choose to get the money right now. If waiting for 1 month to get 10% more money is worth it for most people, you would expect that to be the case in both of the setups.
The difference is caused by the present bias.
In the first setting both events are in the future, so people make a comparison between the time and amounts. In the second experiment, one of the payouts is in the present. And thus people value it more than the payout in the future. The present bias essentially bypasses the critical thinking of weighing the pros and cons.
Okay, one more:
You have decided that you will not go to the party on Saturday, because you have an important project you need to finish by Monday. However, when it’s Saturday night, you still go anyway.
At first, you were weighing the pros and cons of 2 options in the future against each other. However, when Saturday arrives, the party is today, it’s right now. The deadline on Monday on the other hand is still in the future, so you attach less importance to it.
Hopefully that illustrates how the present bias works.
How to Protect Yourself Against the Present Bias
Let’s get to the important part!
While learning about cognitive biases is interesting, it ultimately won’t do you much good. What you really need is to learn how you can protect yourself against these reasoning errors. That way you can make better choices, and get better outcomes in your life.
So what can you do about the present bias?
The first thing you should realize is that the present bias is not going away and that you are prone to it. This would then allow you to realize what is happening, so that you can use your rational thinking part of the brain to correct the mistake that your reptilian brain made.
But, there’s a better way to protect yourself against the present bias:
And that is to get rid of it before it happens.
Let me give you some examples:
- On Friday, call the person who’s throwing the party to let them know you’re not coming because of your deadline. If you do decide to show up on Saturday, you’re now losing face. This is painful, which cancels out the pleasure you would otherwise get in the present.
- Set up a separate account to invest with, then call HR at your job to have them transfer $500 to the investment account. This way the money doesn’t even show up in your main account in the first place.
- To avoid procrastination, tell people what you need to do and when you will have it done. Set an internal deadline with someone who will hold you accountable.
- Commit to doing something way before the actual event. Precommitment is an incredibly powerful tool!
You get the idea.
The most important thing to remember when dealing with the present bias is that it is only there in the present moment. That means the key to protecting yourself against it is to take measurements while the event is still in the future, not the present!
The present bias is only one of the cognitive biases we all face.
No matter how smart you are, or how rational you think you are, you are still prone to it. If you embrace that fact, you might be able to recognize the thinking pattern when it happens, allowing you to think more critically about the choice you’re making.
However, the best way is to deal with it beforehand.
If possible, the best way to deal with the present bias is to put yourself in a position now where you won’t even face the issue tomorrow (or at least make it easier to do the right thing).
Do that and you can defend against the potentially disastrous effects of the present bias.