ABSTRACT
Imagine standing in line at a fast-food restaurant trying to decide whether to buy a thick hamburger and french fries or a grilled-chicken salad. The hamburger may taste better and might even keep you more satisfied through the afternoon, but still you consider the healthier alternative. What drives us to place value on the healthier alternative is recognition of the impact eating unhealthy foods will have upon the quality (and perhaps duration) of our lives in the future. The ability to defer gratification reveals a willingness to consider the consequences of placing too great a value on the present. Any decision that affects welfare in the present time period as well as welfare in any future time period requires the ability to compare outcomes over time. Some will give up potential future happiness to live well in the present, whereas others will consciously forego present happiness with an eye toward the future. The preference for outcomes across time can explain why some make perfectly rational decisions that seem to others impulsive and unwise.
