Intertemporal Choice & Hyperbolic Discounting: From Vaccines to Energy Policy

Tue, 24 Mar 2026 00:00:00 +0000

Individual decision-making often suffers from a fundamental conflict: The present self wants comfort, while the future self needs security.

This struggle, central to Intertemporal Choice, manifests in everything from public health to global energy transitions. At its heart lies Hyperbolic Discounting.

1. The Core Concept: Hyperbolic Discounting

In classical economics, we assume people discount the future at a constant, exponential rate. In reality, we are much more “present-biased.”

We overvalue immediate rewards and overstate immediate costs. This leads to a decision failure where we choose a smaller, sooner benefit (like avoiding a 30-minute queue or a small tax) over a much larger, later gain (like long-term immunity or a stable climate).

2. From Vaccination to Energy Policy

My recent research on Waiting Time as a Behavioral Barrier in vaccination shows how even a 3-month delay in protection leads to a “utility cliff.” This is a classic example of hyperbolic discounting: the short-term cost of waiting outweighs the massive long-term benefit of health.

But this model extends far beyond health. Consider Energy Policy:

The Problem: Energy transitions (like shifting to renewables or nuclear) are typical “current cost, future benefit” models.
The Bias: Implementing green energy requires significant upfront investment and potential short-term price hikes. The benefits—reduced emissions and energy independence—are decades away.
The Short-sighted Path: Because of hyperbolic discounting, both voters and policymakers tend to favor cheaper, fossil-fuel-based energy paths that provide immediate relief but catastrophic long-term costs.

3. The Princeton PPPP Connection

As I look toward the Peking-Princeton Project (PPPP) and related energy policy research at Princeton, my goal is to introduce these behavioral models into energy systems modeling.

By quantifying the “behavioral discount rate” of different demographics, we can design policies that “nudge” society toward long-term thinking. Whether it’s a vaccine or a power plant, the challenge remains the same: Helping our present selves make choices our future selves will thank us for.

This is the second installment in a series exploring the intersection of behavioral economics and public policy. Join me on April 14, 2026, for my PhD dissertation defense!

Trust Decay in Infrastructures: When Policy Meets Polarized Information

Tue, 24 Mar 2026 00:00:00 +0000

In traditional policy modeling, we often operate under a dangerous assumption: Perfect Execution. We assume that if a policy is scientifically sound and economically efficient, it will be adopted and followed.

However, as we navigate increasingly complex digital and social landscapes, a hidden variable is emerging as the ultimate gatekeeper of success: Institutional Trust.

1. The Decay of Trust in Digitalized Environments

My ongoing research, particularly aligned with my interests at the UC Berkeley I School, focuses on the evolution of public trust within changing information environments.

Trust is not static; it decays. In a world of algorithmic filter bubbles and strategic misinformation, the “decay rate” of trust in public institutions (like health departments or energy regulators) has accelerated. When people lose trust in the source of information, they don’t just ignore the message—they often adopt the opposite behavior as a form of resistance.

2. The “Trust Parameter” in Energy Modeling

This is where the theoretical meets the practical. In energy systems modeling—a key focus for my future work with the Princeton PPPP—models typically assume that carbon taxes or renewable subsidies will result in predictable shifts in consumer behavior.

But what if we introduce a Trust Parameter?

The Misinformation Loop: How does misinformation about climate change or nuclear safety alter the perceived risk-benefit ratio?
Policy Failure: In a polarized society, even a financially beneficial energy policy can fail if it’s perceived as an “elite-driven” agenda.
Improving Predictability: By quantifying how trust fluctuations—driven by digital information interventions—impact policy compliance, we can build models that are not just mathematically elegant, but sociologically robust.

3. Future Academic Outlook

As I move toward my dissertation defense and subsequent postdoctoral research, my “Future Academic Calendar” is centered on this intersection: How can we design resilient public infrastructures that account for the fragility of human trust?

Whether we are fighting a pandemic or a climate crisis, the most critical infrastructure we must maintain is not made of steel or fiber optics—it’s the invisible bond of trust between the state and its citizens.

Part 3 of my series on Behavioral Economics and Public Policy. My PhD dissertation defense is scheduled for April 14, 2026.

Energy Policy | Yichao Jin | Academic Blog