Discounting
The Basic Idea
Rather than accepting certain behaviors or events, we like to make explanations for them. If you receive an A+ on an assessment, are you more likely to say it was due to your inherent talent or your hard work? Could it be a mix of both?
When faced with more than one possible explanation for an event or behavior, humans discount, or minimize, the importance of each reason.1 If one explanation seems plausible, we will disregard the other potential factors as irrelevant. The discounting principle is part of Kelley’s Covariation Model of attribution theory, a model for explaining how humans determine the causes of certain events or behaviors.
It is natural to ask (a) whether there are other ways to take plausible causes into account and (b) what might be all the possible forms of such ‘taking into account.
– Harold Kelley on applying the discounting principle in his 1972 article, “Causal Schemata and the Attribution Process”
About the Authors
Dan Pilat
Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.
Dr. Sekoul Krastev
Dr. Sekoul Krastev is a decision scientist and Co-Founder of The Decision Lab, one of the world's leading behavioral science consultancies. His team works with large organizations—Fortune 500 companies, governments, foundations and supernationals—to apply behavioral science and decision theory for social good. He holds a PhD in neuroscience from McGill University and is currently a visiting scholar at NYU. His work has been featured in academic journals as well as in The New York Times, Forbes, and Bloomberg. He is also the author of Intention (Wiley, 2024), a bestselling book on the science of human agency. Before founding The Decision Lab, he worked at the Boston Consulting Group and Google.
