Beyond Gradient Climbing

Freud's pleasure principle (Chapter 4) is the tendency to seek immediate gratification of desires. One manifestation of this tendency is the adoption of the belief one would like to be true rather than the belief that is supported by the evidence. Wishful thinking makes me feel good here and now, even if it may cause me to fall flat on my face later on. Another manifestation occurs in the choice between two actions that induce different temporal utility streams. The pleasure principle dictates the choice of the stream that has the highest utility in the first period, regardless of the shape of the streams in later periods.

More generally, a decision maker, be it an earthworm or a firm, may engage in gradient climbing. At any point in time it scans the nearby options to see whether one of them yields greater immediate benefits than the status quo. The restriction to nearby options is a form of “spatial myopia”: out of sight, out of mind. The restriction to immediate benefits is a form of temporal myopia: the pleasure principle. The earthworm scans the environment to see whether any spot nearby is more humid than the one it is currently occupying and moves to that spot if it finds one. The firm scans the “space” of routines that are close to what it is currently doing to find one that promises better short-term performance and adopts it if it finds one.