In the early 1900s, George W. Ainslie, a psychologist, psychiatrist and behavioural economist from America, developed the theory of picoeconomics. Where microeconomics is used to describe the negotiation for resources between individuals, picoeconomics (or micro-micro-economics) describes a similar process but within an individual himself, helping define different aspects of his behaviour. This is shown in many of Ainslie’s experiments, with both animals and humans, that an individual is more likely to want quicker gratification with a smaller reward then wait a specified time for a larger reward. The information that the later reward is larger, has little affect on the decision made and in fact, the longer the delay the more likely it is that the individual will ignore the size of that reward. Conversely, if the reward periods are closer together, the individual is more prepared to wait. The data produced from these experiments can be demonstrated in a hyperbolic curve, rather than the expected exponential curve, and is known as hyperbolic discounting.
It seems that the sooner the better is the way most people and animals are programmed to respond, despite it not always being the logical choice. George Ainslie explored this and tried to explain this in his book “Picoeconomics” published in 1992, having spent the previous twenty years conducting research and publishing papers on his findings in scientific journals. The science of behavioural economics has developed since Ainslie’s theory was published and other scientists have taken it further and shown that picoeconomics is a plausible opposing view from the theory of rational choice theory that was in the forefront of the field at that point. Rational choice theory says that an individual makes decisions based on the cost of that decision weighed against the benefit to result in the best advantage to themselves. However this does not take into account the moral and ethical feelings of the individual; behavioural economics such as Ainslie’s theory helps explain the individual’s behaviour more clearly.
George Ainslie has been unusual in combining the fields of psychology and psychiatry with behavioural science and also in conducting experiments on animals rather than human subjects, but his theory has proved to be an important step in the late 20th century move forward in understanding behaviour.