Model reveals how learning shapes our saving behavior over time
Learning can be seen as a contagious process that influences how we save money. The speed at which this "infection" spreads reflects our tendency to discount future rewards. Over time, our apparent discount rate decreases and aligns more closely with our true discount rate, a phenomenon known as hyperbolic discounting. This model helps bridge the gap between how individuals and markets make decisions about saving money, without needing specific assumptions or commitment strategies.