Abstract: Heterogeneous memory capacity has been neglected in economics literature, though it may have profound economic implications. Adopting the concept of “memory utility” proposed by Gilboa,Postlewaite and Samuelson (2015), we explore the relationship between memory capacity and individual discounting behavior by building a simple two-period model and comparing its predictions with experimental data. Both theoretical and experimental evidences confirm that memory capacity and discounting rates are positively correlated.