The Math behind Your Uncashed Checks

Receiving a check can feel rewarding; the tedious chore of traveling to the bank and cashing it often doesn’t. Individuals who prize immediate gratification tend to be impatient to receive a check, but then put off cashing it. This behavior is confirmed in a field experiment conducted by Columbia University’s Ernesto Reuben, Northwestern’s Paola Sapienza, and Chicago Booth’s Luigi Zingales. In the study, impatient participants chose to receive a check immediately rather than wait to receive a larger check in two weeks, but many then waited more than three weeks to cash it.


Diagram of an academic equation with handwritten notes explaining that people will postpone cashing a check if its size is less than a lower beta, which indicates more impatience, increases the value one the right-hand side of the equation, implying more procrastination, along with an accounting of the probability of losing the check and the cost of cashing the check. Another annotation notes that to reduce the delay in cashing the check, you could increase its size or the probability of losing it, or decrease the cost of cashing it.

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