A consumer decides to buy a new smartphone instead of saving the money for a future vacation. What principle from behavioral economics best explains this decision?

The decision to buy a new smartphone instead of saving for a vacation can be explained by the principle of present bias from behavioral economics. Present bias means that people often prefer immediate rewards over future benefits, even if the future benefits might be greater. In this case, the consumer values the instant gratification of having a new smartphone now rather than waiting and saving for a more enjoyable vacation later. For example, if the smartphone brings excitement and satisfaction right away, it can feel more appealing than the idea of a vacation that is still months away. This tendency can lead to choices that may not be the best in the long run, as the consumer might miss out on a more fulfilling experience later.