Big Ideas
Hyperbolic Discounting
- We postpone important stuff – We choose even more pain …. if it is just slightly postponed. Like taxes.
- We switch to smaller but sooner reward when the reward is closer at hand
- It’s now or whatever
- When presented with immediate gratification we give up a much higher reward in the future
- We choose smaller but sooner as the time horizon declines
Commitment Types
- The commitments that would be the most effective are often not the ones we would want to commit to in the first place. Because the stakes are so high
- Experiment – 2 levels
- 30$ on line – lost 23 pounds
- 38% success rate
- 300$ on the line – lost 32 pounds
- 71% success rate
- 30$ on line – lost 23 pounds
- Purpose of the commitment device is not to educate you but to make you commit. Hence we need to do it over and over again
- Loss aversion is much bigger motivator than a potential gain
- Commitment contracts should change your present self and your future behavior as well . These 2 requirements are in tension
Using our social Networks for commitments:
- Humiliation as a stick
- Using nagging as a stick
- Social contracts matter. Who learns of your failure or success matters. Who adjudicates or referees matters
- In terms of a commitment, To whom can be just as important as how much
Fortifying Willpower
- people with low internal motivation have higher ego depletion for a related task
- High internal motivation means we need less willpower
- Commitment contracts can lower the need for use of willpower
- A perfect commitment contract always involves a real and substantial threat. Otherwise it doesn’t work
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