commitment strategies

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Nudge blog reader and father Andrew Luccasen reads a bedtime story to his children with a nice behavioral lesson about the wisdom of a commitment device when facing a self-control problem. The story is called “Cookies” from “Adventures of Frog and Toad”  by Arnold Lobel, which was originally published in “Frog and Toad Together” in 1971. “I guess it’s never too early to teach children about cognitive biases and how to attempt to overcome them!” he writes. Here is Luccasen’s account of “Cookies.”

After eating many cookies that Toad baked, Toad and Frog decided they needed to stop. First they agreed to eat one last cookie… then one very last cookie. Having recognized their self-control problem, the friends then seek a commitment device.

Frog puts cookies in a box, but Toad points out that they could just open the box. Frog ties a string around the box, but Toad says they can cut the string. Frog gets a ladder and places the box on a high shelf, but Toad climbs the ladder, cuts the string, and opens the box.

Frog finally takes the box outside of his house, and gives them to the birds in his yard. Frog comments that they “…have lots and lots of willpower.” Toad decides he does not want willpower, and goes home to bake a cake.

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Note: The following post is a revised and expanded version of an earlier one on the paycheck cycle.

On the eve of each new month, a consumer ritual unfolds at Walmarts around the country.

At around 11 p.m. “customers start to come in and shop,” Walmart’s CEO of U.S. Business Bill Simon told a conference of investors last year (pdf of transcript here). Shoppers fill their carts with staples. Baby formula, milk, bread, and eggs. They browse until midnight when their government electronic benefits cards activate. Walmart’s dead-of-night sales zoom well above its daily average over the month.

Retailers have long known about this phenomenon, commonly called the “paycheck cycle,” in which cash-strapped consumers make big purchases when they get paid and are forced to cut back to the bone later in the cycle until the next paycheck arrives. In this tough economy, said Simon, the paycheck cycle is “extreme.” It can affect Americans at all income levels, but at the end of the month, that extremity is most crushing to the poor and the working class.

Continue reading here.

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1) Decision making when you’re in poverty is hard because every decision is critical. Taxes mental resources and self-control.

2) At Buenos Aires restaurants, diners who want salt now have to ask their waiters. Hat tip: Ramiro Lynch.

3) Apple made the shuffle function in the iPod “less random to make it feel more random,” according to Steve Jobs. Hat tip: John Kenny.

4) 100-calorie packs do reduce caloric intake among the heaviest.

5) The Optimism Bias – Time’s cover story.

6) Self-control for Max OS X.

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A) SnūzNLūz – the alarm clock that donates any amount you designate to a charity you despise if you don’t wake up.

B) The alarm clock that shreds any amount of money you designate right before your eyes if you don’t wake up. (ps. It’s not clear if this alarm clock is real.)

If you answered B), the Nudge blog thinks there’s something odd going on. In fact, it seems like a bonafide behavioral puzzle. You’re losing the money in either case. But in only one is that money going to someone or something you despise. If A) is more ruthless, it’s clearly the vividness of the shredding. But what makes that so painful?

Consider this thought experiment. If you could design a magic alarm clock that would cause a $20 bill to disappear from your wallet and reappear in the bank account of that co-worker you can’t stand every time you hit snooze, and one that would cause a $20 bill to disappear from your wallet zip off somewhere into the ether, here’s guessing that, relatively speaking, the more ruthless clock would be A).

Hat tip: David Glover

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Yifan Zhang and Geoff Oberhofer, the duo behind Gym-Pact, the behavioral economics gym plan in Boston we posted about earlier this year, have taken a 10-pack of questions about fitness, business, and human behavior. While Gym-Pact has arrangements with Boston-area gyms, the company has just released an iPhone app at www.pactapp.com to help people keep commitments at gyms anywhere. Yifan and Geoff answered our questions over email. A transcript is below.

 

 

 

 

Nudge blog: How do you make money from your plan? Just like a regular gym, you seem to profit more when people miss their appointments. Is that the case?

Gym Pact: We actually get people to the gym on 90% of the days they commit! Gym-Pact’s model does not profit from people missing appointments. Rather, our main revenue comes from the service we provide to gyms (selling discounted memberships, referring people, etc).

NB: You don’t own a gym. Instead you partner with existing gyms. What kind of success have you had with these partnerships in Boston? Do your members visit more frequently? Are you tracking data, particularly on success and failure rates?

GP: Yes! We love data, and so far the data loves us back. We’ve held our 90% success rate for now over 5 months, and our members commit on average to 3.5 days per week!

NB: Have you experimented with the design of the penalty itself? Are certain size penalties delivered at certain times more effective than others?

GP: While we don’t want to change things up too much for our current members, who find our existing system very effective, we are launching an iPhone app. We’re accepting 100 beta testers currently at www.pactapp.com, and we will be trying a few motivational fee designs, including just tracking attendance without the fee. If you’re interested in giving this a shot, all you need is an iPhone and we can set you up at any gym in the country.

NB: How do you enforce the commitments people make?

GP: We have our patent-pending attendance system placed at partner gyms, where Gym-Pact members text us a constantly updating code when they check in and out of the gym. We (now have an) iPhone app to track attendance as well. Our members put up money to motivate their fitness commitments, and we enforce those commitments based on attendance.

NB: By putting the penalty for missing the gym in financial terms, does it actually boomerang and lead people to skip more often? In other words, do financial penalties crowd out personal norms?

GP: Not that we’ve seen so far. Regular exercise is something all of our members strive for, and they know it’s good for them! We just give them the extra kick to get to the gym with the regularity they’ve always wanted.

NB: What have you learned more generally about human behavior and fitness since you first conceived of this idea?

GP: When given the opportunity, people will cheat! We have to make sure that our Gym-Pact(SM) system is cheat-proof so that there are no excuses and no opportunities for members to cheat themselves of regular exercise, only results.

NB: Do you have any intentions to revise Gym Pact’s business model by incorporating more behavioral theory?

GP: We have a few ideas that we will be testing out with our iPhone app – more to come on this!

NB: If you owned your own gym and could design it from top to bottom drawing on behavioral economics, what sorts of features would you consider?

GP: We would definitely structure the membership fee to incentivize regular exercise. Regular attendance is not only good for members, it’s great for gyms because it’s the strongest signal that a member will continue being a member of the gym.

NB: How does your iPhone commitment app work?

GP: We use GPS technology and our database of gym locations in the U.S. to take attendance. Other than that, it is the same Gym-Pact(SM) program. For our beta testers, however, we will be adding a few more options so if you’re curious, feel free to try it out!

NB: Do you have any plans to incorporate social media in the device to enforce commitments through peer pressure?

GP: Yes! Sharing your successes and competing with friends is one of the strongest motivators, and we definitely will be incorporating these aspects to our app and regular Gym-Pact program.

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Every day, procrastination threatens dissertations around the world. Another class, another paper, another experiment, another workshop – something is always getting in the way. Recognizing this, the University of Chicago has created a commitment strategy known as a Write-In to help students be productive. Designed after similar writing “Boot Camps” at schools like Princeton and Columbia, the Write-In is a week-long workshop in which 20 students pay a $50 “motivational deposit” and commit to showing up at the library each morning and writing for four hours. (There’s also an optional afternoon session.)

In exchange, they get a designated space to work, coffee, snacks, and lunch with other students who choose to stay after the morning session wraps. If students show up everyday and work, they get their $50 back at the end of the week. They also get a shirt that reads “I write, therefore, I finish” in Latin. Sssshhhhh about the shirt, though. That’s suppose to be a surprise at the end.

Started last spring, the Write-In is becoming a quarterly occurrence at Chicago’s Graduate School. (The next session is in June). Now Chicago’s Law School is starting its own Write-In for students working on final papers. The Law School Write-In requires students to show up from 8:30 a.m. – 5 p.m. for three straight days.

Graduate students tell staff it has helped them push projects forward. One student came from as far away as France for the Write-In. (She left her two young kids at home). Meghan Hammond, who coordinates the Write-In program for dissertations, says staffers have been surprised when students say they wished the program was offered more than once a quarter. In essence, they’ve asked for more commitment strategies.

Different parts of the program appeal to different students. Some like paying and getting the money back, which they use to go out and celebrate. Others like the informal writing groups that form after the week is over. Others just like being able to roll out of bed and go straight to a desk with a fresh pot of coffee, rather than having to stop by Starbucks and wait in a line on the way to school.

Says Hammond: “We (people) have certain patterns of behavior that we have to do before we start doing a task. We all have our rituals. If we (at the University) can take away some of those barriers, they can jump right in.”

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Yifan Zhang and Geoff Oberhofer, the duo behind Gym-Pact, the behavioral economics gym plan in Boston we posted about earlier this year, will answer your questions about their business.

 

 

 

Post your questions in the comments section or email them to nudgeblog@gmail.com by the end of the week (Friday, May 13). Zhang and Oberhofer will answer on May 18th, the day Gym-Pact releases a iPhone app that lets people make their commitments at any gym. Before you send a question, you might check out the FAQs on the Gym-Pact site.


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1) Banking interface inspired by behavioral economics.

2) Smart commentary from Modeled Behavior on the idea of giving people vouchers to fight obesity.

3) A “commitment app.” Promise to do X. Announcement about X sent to friends. App verifies promise. Announcement about doing X sent to friends.

4) Forbes columnist: Opower utility bill “one of the most important energy innovations of the last decade.”

5) IPA puts out new behavioral economics pamphlet with 9 case studies. (Non-members have to buy the pamphlet.)

6) What’s your appetite for risk?

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An example of what Ian Ayres would call a commitment contract.

Hat tip: Greg Horowitz.

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Food manufacturer Kashi participates in a rewards program that gives points to consumers who recycle their cereal box. Of course, giving rewards after the box has been recycled would be unwieldy – Just imagine trying to verify which Kashi boxes got recycled and which didn’t. So Kashi directs people to enter a code on the inside of the cardboard box and then recycle it, a strategy straight out of behavioral research on voting that finds asking people to pledge to vote (or tell someone when and where they plan to vote) increases their odds of voting. So even if you could just enter the cereal box code and throw the box away, Kashi thinks you won’t, especially after you’ve already committed to recycling it.

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