Home » Archive » When “Yes” is eventually followed by “Damn!”

, written by Jeremy. Read the commentary.

Poor writing is traditionally the plague of academia. So glory is due Gal Zauberman (University of North Carolina) and John Lynch Jr. (Duke University) for a great problem statement: When “Yes” is eventually followed by “Damn!”

Zauberman and Lynch are experimental psychologists who examined why we imagine that the future will be less hectic than today. They also asked if the same delusion applied to investments of money.

Old and recent research suggests that multiple goals competing for limited resources are a problem not soon to disappear. Zauberman and Lynch proposed that in these situations people prefer greater future investments to smaller immediate ones.

Note: Us economists figured this out a long time ago. We put these ideas together and called it the time value of money. But as a group we’re pleased that others are getting the message.

Zauberman and Lynch suggest immediate gains win over future gains under the following two conditions: (a) Immediate investment blocks other, proximate activated goals that require the same resource, and (b) in the future, more slack is anticipated and thus less is sacrificed. Surprising, at least to some, is the conclusion that while the principle applies to both time and money, time is discounted more heavily than cash.

So, why do people doggedly adhere to the illusion that they will have more time in the future than today? And why is the perception of money immune to this mirage?

The answer seems to pivot on fungibility. Time is less fungible than money.

If you’re short on cash (and you have a good credit rating) you can borrow. There’s no such thing as borrowed time. You can save money; you can’t bank time.

But it is possible to rearrange time in the future. One can work in advance or use holiday time so “it is so easy to persuade us to give talks at other schools, write tenure letters, serve on committees, comment on each others’ papers, and so forth when requests are made far in advance. But in the immediate future, time is much less fungible”.

In part the reluctance to endure immediate pain is due to reluctance to give up on active goals (and the fulfilling satisfaction of their completion) in the near term. It’s a strategic choice in the short-term that has dire consequences in the future. While saying yes to a long-term commitment may have a momentary reward, it is often the case that those tasks have no long-term payoff.

Update: If it’s true that you’re busy today because you’re successful, tomorrow will be worse. Your success today will bring new opportunities tomorrow. Therefore, the best time to do something important is right now.

Found via businesspundit.

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