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The civil war of the self

Ryan Hahn's picture

I recently blogged about a website that allows people to bet with themselves on whether they will achieve certain weight loss goals. The smart minds behind the website, Dean Karlan and Jonathan Zinman, have provided an answer to the question I posed at the end of that post - are there any better uses to which we could put these kinds of commitment devices?

In turns out, they have already worked quite well in helping people quit smoking in a developing country context. The researchers carried out a randomized control trial wherein participants deposited money into a savings account and forfeited this money at the end of six months if they failed a nicotine test. (Surprise test visits followed at a later date.) Here's what they found:

The finding that a limited-time (6-month) commitment produces longer-term smoking cessation suggests that commitments can facilitate the formation of good habits. This in turn suggests that commitment contracts may be worth subsidizing if viable private markets fail to develop in some settings (due, e.g., to legal obstacles or externalities). In some cases commitment contracts could serve as a lower-cost substitute for, or low-cost complement to, conditional cash transfers.

To put it more bluntly, we're constantly at war with ourselves. At least in this example, I find it hard to agree with the criticism expressed against behavioral economists and their support for "libertarian paternalism." It's really a question of creating markets for these commitment devices, potentially supported by new technologies like the internet and mobile banking, all of which could give us a better chance to win the war with ourselves.

Comments

Submitted by David Jinkins on
I wouldn't say it is as serious as being "at war with ourselves." I think of it as a discount problem. Take a convex discount factor (difference between short term and med term greater than difference between med term and long term). Since we value our medium and long term futures similarly, today we may decide to suffer in the med. term for modest returns in the long term. When the med. term becomes the short term, however, we value our happiness in that period much more than our happiness in the future. Time inconsistency, if you will. In the smoker's case, at time 1 he may decide that given his current preferences, lifetime utility (times 1-4) will be higher if he quits smoking and suffers at time 2. However, at time 2, he will again rationally decide that he will have higher lifetime utility by continuing to smoke. The commitment contracts discussed in your post are a way that the smoker can force his future self to behave according to his current preferences. Not necessarily a good thing.

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