Friday, 4 March 2011

Discounting

There's this interesteing theory in Economics about why we are so prone to put things off. It's called dicounting. Discounting is basicall assigning certain values to activities or acts in two categories: now and in future. It's based on the fact that while we value certain things highly and aspire to them, everyday life differs from what we would like it to be. While we have dreams and plans we live right now and while some of our choices are affected by those dreams we hope to achieve some time ahead, most of our decisions are affected by our current state.
This, in my opinion, closely interlinks with so called "hot and cold" states. If you're upset and tired, you get peeved off easily. Whem you calm down and have a glass of wine, you vow to never get upset over silly things again. In the first instance, you were in "hot" state,  you were irrational and your judgement was a bit cloudy. Second instatnce, you were in your "cool" state when you were calm and were making plans for future.
This is my discounting table on scale 0-10 points (10 being the most valued and wanted, 0 being for something I don't really care about):


Activity
Points value in the future
Points loss, i.e. what is the cost of doing it in terms of “now points”
Points value discounted:
“future points” minus
“now points”
 Signing up to the gym
 Great body :
5 points
 Lack of time:  -4 points
5 – 4 = 1 points
 Doing the dishwasher
Clean dishes:
 3 points 
Time it takes:
-2 points 
3 – 2 = 1 point
 Tidying up my study
No falling over scattered folders:
 4 points
It will get messy again soon:
 -2 points
4 – 2 = 2 points
 Getting up an hour earlier than usual
Catching up with my studies:
6 points 
 Lack of sleep: -2 points
6 – 2 = 4 points
 Studying instead of knitting
 Catching up with my studies:
6 points
No me-time:
-3 points 
6 – 3 = 3 points
 Making proper dinner
 Tasty meal:
5 points
Time spent cooking & shopping:
 -2 points 

5 – 2 = 3 points


This is obviously my table and is it represents my personal preferences.
In the second columns I rate how much I value advantages given from given activity.
In the third column I rate how much points I deduce because of the cost of the given activities
In the forth column I sum up two previous columns.

Now, you can see that while I value highly the IDEA of catching up with my studies (6 points), when I come back home from work, it does not seem that appealing anymore despite ideas in my head of me prancing around in toga waving my shiny new degree (value goes down to 3 points).

In Spousonomics, book I read recently, this subject is approached in connection to why we try, but fail to be wonderful spouses we always dreamt of ourselves to be. Worth reading!

So, on the days like today, I really wonder whether I have chosen the right path. I wonder how much happier RIGHT NOW will it make to be able to go home and just do what I enjoy doing. Not feeling guilty about sleeping a bit longer. Watching TV. Playing with Amber. And obviously knitting.
I mean, we don't even know if our ambitions and dreams will come true at that point in the future we wait for. If they won't, won't we be all better off actually enjoying living in the present moment?
Sometimes I wish I could have a little cottage somewhere in the country where I could hide and just live the simple life. And yes, I'm very happy Waitrose does home deliveries.

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