Hyperbolic Discounting – Why Time and Size Matter in Learning

If you’re involved in the learning and development space, you cannot have missed the trends of gamification and microlearning. As organisations consider implementing these approaches, they are often vary of buying into fading fads – and rightfully so! However, a lot of the new methods and approaches that may come across as gimmicks actually have valid foundations in the science of teaching, pedagogy, as well as educational psychology. To help organisations understand why things like gamification and microlearning work, we decided to open up some of the learning psychology behind each approach. Hence, let’s look at a phenomenon called hyperbolic discounting and it’s effect on learning.

What is hyperbolic discounting in short?

Hyperbolic discounting is a phenomenon initially discovered in behavioural economics and is in fact one of the cornerstones of the field. The prevalent finding and consequence of hyperbolic discounting is people’s preference towards smaller rewards in the near future rather than large rewards in the distant future. Generally, research sees people as present-biased, meaning they are more likely to sacrifice long-term gains in terms of short-term interest.

Now, why does this matter in learning? The two major modern learning approaches basing on this behavioural trait are instant rewarding and microlearning:

1. Hyperbolic discounting explains the success of gamification

The underlying principle of gamification is to provide continuous and relatively high frequency rewards to motivate the learner. Whereas large contexts of learning may seem overwhelming, gamification helps learners to track their own progress in more manageable pieces. With instant rewards, learners always get some kind of “credit” for their participation.

This happens to play perfectly on the psychology of hyperbolic discounting. Rewards are no longer vaguely defined (e.g. this learning helps you in your career path) and difficult to assign a mental value to. Rather, learners know that when they commit to something, they will be instantly rewarded. Naturally, the rewards come in many kinds: badges, points, credits, financial rewards and social recognition just to name a few. The common denominator is that learners can “collect” them instantly.

2. Chunking learning content to cater for the present-biased

Now, it’s likely that gamification is not suitable for everything. Yet, the psychology of hyperbolic discounting and its effect on learning remains. The structure of learning content is a major factor in catering to the phenomenon. Whereas gamification tends to cater to extrinsic factors, you can use a bite-sized learning content structure to cater to the intrinsic aspects of learning motivation.

For instance, you may have a course you require your employees to take. However, as a whole, the course might seem overwhelming with its length. Learners procrastinate and delay uptake due to the high time investment required and rewards being outside of their immediate horizon. To overcome the problem, you should try chunking the content into manageable pieces. The approach of chunking content overlaps a lot with the concept of microlearning. Overall, the approach helps your learners to manage their own targets better. Doing a small task for a few minutes feels a lot easier. Consequently, this could increase your learning uptake and time-to-competency, as learners are engaging more consistently and frequently.

If you have challenges in your digital learning engagement and participation, we may be able to help. The help can be in the form of consulting on learning design or hands-on content development. Just contact us here to discuss your challenges. 

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