Self-commitment devices: How behavior can be shaped without formal incentives
Marta Rosa
Membro do departamento de R&D do IBC
26 de Maio 2023
"The formula is the following: make it simple, cheap, and fun and it will probably be successful."
Have you ever tried to quit smoking but couldn’t? Have you ever decided that you were going to exercise more often but, after a few weeks, your tracksuit wouldn’t come out of the closet? If so, congratulations! You’re officially a human being.
According to economic theory, if you intend to do any of these changes in your life you should have no problems. By looking at the first case, it’s quite straightforward that smoking, besides being the cause of many health issues, also has financial costs associated. The same works for the second example, where the only (possible) opportunity cost associated with exercising is the time we could have spent hanging out with friends or sleeping more – in this last explanation, inertia may also play a decisive role. In both situations, it is unambiguous that the benefits surpass costs so why can’t we stick to our self-interest?
Behavioral science has demonstrated that people suffer from self-control problems. Individuals have difficulties in rationalizing their thoughts, emotions, and decisions in order to achieve future goals. This condition is associated with the fact that many of us are present-biased. In other words, we tend to overvalue immediate rewards and costs, the latter in an even more extreme way due to loss aversion (another cognitive bias), at the expense of long-term gains or sacrifices. Yet, as you may have noticed while reading all this, some of us also recognize we’ve already had this sort of trouble – the so-called sophisticated hyperbolic discounters.
Formal incentives are an easy (and probably the most known) way of helping us to achieve objectives that demand great willpower just like these. In (Volpp et al., 2009), in a randomized and controlled trial involving over 800 employees of a large US company, participants were randomly assigned to receive either usual care for smoking cessation (including access to smoking cessation programs and nicotine replacement therapy) or usual care plus monetary incentives. The main results of the study showed that participants who received financial incentives were more likely to quit smoking than those who received usual care alone. At six months, the quit rate was 14.7% in the financial incentives group, compared to 5.0% in the usual care group.
Nevertheless, there are other (and very interesting if I may say) alternatives. Nudges, which are little pushes that guide us to take optimal decisions by taking advantage of our heuristics and cognitive biases, have also proven to be quite effective ways. The formula is the following: make it simple, cheap, and fun and it will probably be successful. In case you aren’t familiar with this concept, nudges are often used in public policy, marketing, and other fields to encourage desirable behaviors while still giving individuals the freedom to make their own choices. This last part is what distinguishes this approach from actions like ending up with high-sugar foods in schools or even forbidding certain drugs. “Libertarian Paternalism”, a notion that was first introduced in (Thaler & Sunstein, 2008), is basically what ensures individuals are oriented towards favorable results without restricting their freedom. But how specifically can this be used to, for instance, increase the levels of physical exercise?
StickK, Beeminder, or Pact are some of the most well-known online self-commitment devices. By creating commitment contracts – also associated with eliciting the implementation of intentions – and setting up financial consequences – related to loss aversion –, such as monetary penalties or donations to charity (it works even more effectively for an organization we don’t like), these platforms increase the perceived cost of failure in case we don’t meet our desired goals. In (Ariely & Wertenbroch, 2002) it was observed that setting deadlines for a task can improve performance. These researchers strongly suggest that individuals can benefit from setting external deadlines or using precommitment strategies to motivate themselves and overcome procrastination tendencies. Participants who committed to a deadline by precommitment had significantly better performance on the task compared to those who did not have a deadline or a self-imposed one. Additionally, the study found that the positive effect of precommitment on performance was even stronger for individuals who were prone to procrastination.
After reading all this, it’s pretty obvious that you aren’t the only one who struggles with achieving your goals. The good news is that this problem has extensive literature you can use to help you. Besides formal incentives, there are several nudges we didn’t have time to explore here. It’s just all about experimenting and seeing which methodology suits you best! (Tip: try to combine more than one 😉 )
References:
Ariely, D., & Wertenbroch, K. (2002). Procrastination, Deadlines, and Performance: Self-Control by Precommitment. Psychological Science, 13(3), 219–224. https://doi.org/10.1111/1467- 9280.00441
Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Penguin Books.
Volpp, K. G., Troxel, A. B., Pauly, M. V., Glick, H. A., Puig, A., Asch, D. A., Galvin, R., Zhu, J., Wan, F., DeGuzman, J., Corbett, E., Weiner, J., & Audrain-McGovern, J. (2009). A Randomized, Controlled Trial of Financial Incentives for Smoking Cessation. New England Journal of Medicine, 360(7), 699–709. https://doi.org/10.1056/nejmsa0806819