Procrastination and Kicking Bad Habits

Here I am signed up to an expensive annual gym membership and how many times have I been there last month? A shameful five visits. This is not what I had in mind when I signed up at the beginning of January as my New Year’s resolution. What happened? According to psychologists (and more recently, economists) this is a good example of “time inconsistent preferences” – the idea that we may ignore our plan for the long run once we face temptations in the short run. We become weak in the face of temptation. Read et al (1999) conducted an experiment where they offered subjects a choice of watching a light-hearted film such as Mrs. Doubtfire or a “high brow” critically acclaimed success such as “Schindler’s List” or “Three Colors: Blue”. Over 50% opted to watch the likes of Mrs. Doubtfire. However, when asked what they wanted to watch in a week’s time, over two thirds chose a highbrow movie. People valued the fact that watching “Schindler’s List” or “Three Colours: Blue” would make them more cultured and wiser for the rest of their lives. Given the choice now however, the temptation to watch jokes about fake plastic breasts outweighed the longer term benefits of “Schindler’s List”. So what can we do about? We can make a commitment that we cannot reverse to “self improving” activities. Indeed two Yale economists, Dean Kaplan and Ian Ayres, set out to help people do just that. They established Stickk which allows you to buy “Commitment Contracts”. These contracts require the completion of an activity that you may otherwise put off (going to the gym, quitting smoking, losing weight). Once you sign the contract you hand over a sum of money, say $1,000, which you get back only if you complete your commitment by the specified date. Here there is no vague motivation. If you don’t meet the contract in time, you incur an immediate cost of $1,000. Stickk doesn’t make money from people not meeting their contracts; they make their money from advertising.  If you procrastinate, the $1,000 will go to a randomly selected charity (or for extra motivation, an “anti-charity” of your choice). Companies are aware of our procrastination habits. Gyms, for instance, try to capture consumers who will consume less than intended. Indeed such instances are examples of commitment to self improving activities backfiring. People may find themselves signing up to products – membership to the Royal Opera House or annual magazine subscription– that they don’t really want or use, and companies take advantage of it. Therefore, to keep motivated we need some effective immediate punishment for non compliance. Bad repercussions in the distant future do not have such (relatively) powerful effects on our decisions right now. For me, finding a gym buddy seems like a promising start to avoid falling victim to the expensive annual membership catch.