The present bias refers to the tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs between two future moments (O’Donoghue & Rabin, 1999). This tendency can also influence borrowing decisions, payday loans and other forms of credit provide access to money immediately while repayment occurs over time. As a result, borrowers may focus more on the short-term benefit of receiving funds than on the future cost of repayments and interest. For example, a present-biased person might prefer to receive ten dollars today over receiving fifteen dollars tomorrow, but wouldn’t mind waiting an extra day if the choice were for the same amounts one year from today versus one year and one day from today (see time discounting). The concept of present bias is often used more generally to describe impatience or immediate gratification in decision-making.
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References
O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89(1), 103-124.