The Punishment Swap

My nine-year old has been particularly disobedient lately. Her behavior was so unacceptable last week I threatened not to take her to her best friend’s birthday party, planned for last weekend, if she did not mend her ways. Well, the threat went unheeded; she proceeded almost immediately to do the thing that she had been told not to do. So I declared that she would forfeit the birthday party. She became instantly gloomy and remorseful, but seemed to accept the punishment until, that is, the day before the birthday party. Only then did she realize the full weight of the loss.

So, she came to me to renegotiate the punishment. Would it not be possible to attend the party and accept some other kind of punishment? I asked her what she had in mind and she shared her obviously well thought-out plan for a week deprived of television.  Knowing her fondness for her TV series, I considered the deal fair and accepted the punishment swap. The party was a great success and she had enormous fun with her friends. The decision had been a shrewd one. However, on the very same evening, she sat down as usual in front of the TV to watch her series and was horrified to see me exert my parental control.  Once again, the full consequences of the punishment had only just dawned on her.

This is an extreme example of what psychologists call a ‘present bias’. It appeared that the value of anything that she was due to receive further than 24 hours ahead – positive or negative – was discounted to zero. As a result, maintaining the disobedient (but no doubt pleasurable) behaviour despite the threat of a punishment that lay a week in the future was an easy decision. So was the decision to swap the imminent forfeit of a birthday party against a week-long TV ban. The thing to be gained always had a positive value; the thing to be sacrificed always had a value of zero.

This kind of inconsistent time discounting, commonly known as hyperbolic time discounting, is common in children. As we get older, though, people learn to respect the future a little more. Still, a tendency to be present-biased remains even as adults. One needs only to thinks about the difficulty people have in saving for retirement, a decision that involves sacrificing consumption in the present in favour of (hopefully greater) consumption in old age. Similarly, we are attracted by credit card deals with low initial ‘teaser’ rates or by payday loans, even though the costs over the longer-run are excruiatingly high. And we are known to over-indulge in sugary treats today while promising ourselves to diet tomorrow.

My daughter came to me again this morning to renegotiate her punishment. Another of her friends has a birthday in a couple of weeks’ time. She doesn’t mind forfeiting that one, she said, because she doesn’t like the friend as much.

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