Time and Value Perception

People value future events more than equivalent events in the equidistant past. Because the future is more uncertain and more changeable than the past, there are circumstances under which people may rationally value future events more than past ones.

time-value-perception

So, people place significantly higher value on the near future than on the near past. The emotional impact of a future event increases as it approaches, but once the event has occured, its emotional impact significantly decreases.

Therefore, establishing the value of an event before it happens will be advantageous to people who profit by it and disadvantageous to those who pay for it. Consumers may be wise to establish the price of a good or service after it is delivered or consumed, rather than before.

There is an implication that’s significant for successful negotiation: pay later as a buyer, and charge earlier as a seller. This means that, theoretically, you’ll be more likely to charge someone less if you, for example, send the bill to your client after you perform a service. Conversely, you’ll be more likely to pay less if you negotiate after the service has been performed. Of course, if you’re a service provider, you would want to charge upfront to maximize your profit. Don’t let yourself succumb to a post-job negotiation.

Summing-up: Knowing how time changes the way we perceive things can help us to plan and deal with unforeseen circumstances. Simple awareness of these heuristics can make a huge difference in coping, decision making, and understanding why we behave and react in certain ways.

These notes have been taken from:

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