Final answer:
Going without something now to gain bigger rewards in the future is known as 'delayed gratification,' which involves understanding 'opportunity cost' as a central concept of intertemporal decision making. This concept requires a person to evaluate what they are giving up in the present against potential future benefits.
Step-by-step explanation:
Going without something in the present in the hope of achieving greater gains in the future is called delayed gratification. Delayed gratification is a concept that involves making individual sacrifices for the greater good or for long-term success. It is a form of intertemporal decision making, which takes into account the opportunity cost of foregoing something now to benefit from something later.
Opportunity cost is a key element in this type of decision making. It represents the value of the next best alternative that one gives up as a trade-off. If participants in financial markets, for example, decide to save their money rather than consume goods immediately, they are anticipating that the future rewards will outweigh the current pleasure or benefits they forgo. Thus, the concept of opportunity cost is inherently tied to making choices about investments and savings over a period of time.
In sum, individuals and market participants alike must process abstract information and anticipate future circumstances to make decisions that may involve foregoing immediate enjoyment or benefit in hopes of achieving a greater outcome in the future.