Thursday, February 15, 2018

econlife - The Easiest Way to Keep a New Year’s Resolution by Elaine Schwartz

Whenever I do the dinner dishes, I listen to a “page-turner” mystery. In fact, listening to the 13 novels in the Maisie Dobbs series, I actually looked for extra dishes. Now, it turns out that my dishes/mystery “complementarity” was a research topic. Wharton professor Katy Milkman called the phenomenon temptation bundling.

Where are we going? To our New Year’s resolutions.

Temptation Bundling

With temptation bundling, we combine our “wants” and “shoulds.”

The Experiment

To see if temptation bundling had academic resilience, researchers from Penn and Harvard set up three scenarios at a campus workout facility. All three groups got iPods. But the first group’s iPod was loaded with tempting page-turner novels that could be accessed only at the gym. The second group also got the good books on their iPods. However, they were not required to listen at the gym. Then, acting as a control, the third group got iPods, a $25 Barnes & Noble gift certificate, and a sample workout with a reminder that exercising is good for your health..

The results confirmed most of what we would expect. Group 1’s workouts exceeded the control group by 51 percent and for Group 2, 29 percent. So yes, temptation bundling did increase the frequency of the undesirable activity—the “should”– but after a temporary Thanksgiving break, its impact on all groups diminished precipitously:


Utility Streams

Temptation bundling creates added value. It limits the time used for your indulgent wants while encouraging a distasteful activity that will be good for you. You wind up with less of the “wants” and more of the “shoulds.” Done alone, each activity has less utility. Done together their synergy is more valuable.

The Penn/Harvard research team summed up the value boost with two utility streams. Our wants have less cost at first because they are so pleasant. But then the guilt and wasted time kick in. Meanwhile, the “should” starts out really painful. But then as time goes on, its benefits surface.

Graphed (below) the “wants” curve sinks over time but the “should’ curve ascends:


Temptation bundling is really just about cost and benefit. By combining a want and a should, the wants become less of a minus and the shoulds, more of a plus.
We also just waded into the waters of behavioral economics.

Our Bottom Line: Commitment Devices

Temptation bundling is one of many commitment devices. Defined by behavioral economists, commitment devices are just what you would expect. They are incentives that encourage us to stick with an activity.

Here are some commitment devices:


Most of us need commitment devices to keep our New Year’s resolutions. Maybe temptation bundling is the one.

My sources and more: I first learned about Dr. Milkman’s work on temptation bundling in a Freakonomics podcast. (My speedy 4 mile walks and good podcasts are another temptation bundle!) The podcast took me to Dr. Milkman’s co-authored paper and then to a broader look at commitment devices.

Please note that this post is an updated version of a 2015 econlife.

Ideal for the classroom, reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.