Indeed. On the subject of long vs. short term thinking, or the time-value of money, the most clear example is the case of rent-to-own stores. Rent-to-own is a

Indeed. On the subject of long vs. short term thinking, or the time-value of money, the most clear example is the case of rent-to-own stores. Rent-to-own is a form of financing, equivalent to taking on debt, but unlike other forms of debt, we know that it's used specifically for buying certain classes of durable goods, such as furniture, appliances and televisions. Due to the nature of these goods, we can assume that in most cases the owning of a given piece of furniture, for example, is not a necessity, and further, that buying these goods new is not the lowest cost alternative, when speaking about the total or even initial price. For example, I might be able to get a sofa off the street or sleep on a mattress without a frame or box springs. Rent-to-own is also heavily favored by poor folks, who have another opportunity, which is to save up and replace their television or furniture at a later date for a lower total cost. Making the latter choice is the rational one, if your personal discount function for the future value of money is sufficiently low. That is, if you have a long-term perspective, you value future abundance nearly as much as present abundance, and so save up for an outright purchase. However, if you have a short-term perspective, the extra you paid for the television would seem insignificant, because it accrued far in the future, and you're more concerned with immediate abundance.