Interest, time preference theory of
A psychological theory of the existence of rates of interest. An individual prefers consumption now to consumption in the future for two reasons. First, he is aware of the possibility that he may be dead before he can derive the benefits from postponing consumption. Second, and less rationally, there exists a tendency for people to undervalue future benefits – a ‘deficiency of the telescopic faculty’.
Reference: The Penguin Dictionary of Economics, 3rd edt.