my recent (in a macro way) encounters with choices/temptation/ DO THE RIGHT THING
having:
1. read a behavioral economics book
2. chatted over coffee with a friend about choices/rationality
3. discussed a friend's recent troubles
i'm wondering if choices is such a good thing. Although I've always believed in it, but perhaps we also need to provide tools to people to LIMIT their choices simultaneously as we provide them the choices.
WHY?
1. In behavioral economics, there is a now-thinking-about-future self and a now-thinking-about-now self. For example, you think it's really bad if you go out late tonight (maybe because you have something important the next morning) but by night time, you have changed your decision. Likewise, pregnant women often want to give birth naturally, but end up having a ceasarean during the actual painful process.
2. In this book I read, the prof let the students either:
A. Turn in one assignment per month for 3 months. Penalty for late assignments. i.e. "Dictator"
B. Turn in all assignments at the end of 3 months. i.e. "Complete freedom"
C. Submit a schedule at the beginning of the term with penalty for late assignments. i.e. "Tool for self-restrain"
Guess what? In C, since you can put the schedule exactly like in B, as in just submit all the assignments at one go at the end, since you can always submit early, you should do just that. Why would people schedule it like the way it was scheduled in A? What's more interesting is that people who were in condition A did much better than B. Of those in C, those who used the tool did as well as those in A, whereas those who did not commit (i.e. B) ended up doing worse!
It seems that people at least KNOW they have a commitment issue, and who rather put penalties on themselves when given the chance, just to resist temptation/ do the right thing!
THEREFORE,
1. this has many public policy issues i can think of
2. this can have many real life applications, from staying away from situations that will result in you doing something you will regret (eg. unprotected sex, drink driving, a night out before that important appointment) to even giving yourself a penalty for not doing something that will benefit you (eg. bet with a friend that you will pay him $10 every time you miss your appointment with the doctor/dentist/gym instructor etc)
1. read a behavioral economics book
2. chatted over coffee with a friend about choices/rationality
3. discussed a friend's recent troubles
i'm wondering if choices is such a good thing. Although I've always believed in it, but perhaps we also need to provide tools to people to LIMIT their choices simultaneously as we provide them the choices.
WHY?
1. In behavioral economics, there is a now-thinking-about-future self and a now-thinking-about-now self. For example, you think it's really bad if you go out late tonight (maybe because you have something important the next morning) but by night time, you have changed your decision. Likewise, pregnant women often want to give birth naturally, but end up having a ceasarean during the actual painful process.
2. In this book I read, the prof let the students either:
A. Turn in one assignment per month for 3 months. Penalty for late assignments. i.e. "Dictator"
B. Turn in all assignments at the end of 3 months. i.e. "Complete freedom"
C. Submit a schedule at the beginning of the term with penalty for late assignments. i.e. "Tool for self-restrain"
Guess what? In C, since you can put the schedule exactly like in B, as in just submit all the assignments at one go at the end, since you can always submit early, you should do just that. Why would people schedule it like the way it was scheduled in A? What's more interesting is that people who were in condition A did much better than B. Of those in C, those who used the tool did as well as those in A, whereas those who did not commit (i.e. B) ended up doing worse!
It seems that people at least KNOW they have a commitment issue, and who rather put penalties on themselves when given the chance, just to resist temptation/ do the right thing!
THEREFORE,
1. this has many public policy issues i can think of
2. this can have many real life applications, from staying away from situations that will result in you doing something you will regret (eg. unprotected sex, drink driving, a night out before that important appointment) to even giving yourself a penalty for not doing something that will benefit you (eg. bet with a friend that you will pay him $10 every time you miss your appointment with the doctor/dentist/gym instructor etc)