I think this article makes some good points. But part of what makes this kind of economic deal work is simply attention. For those who focus their attention on money and wealth, this kind of “bet” on changing your behavior would work. For those who really aren’t as concerned about money it probably wouldn’t work.
Can economics make you a better person? – By Tim Harford – Slate Magazine
Economists rarely make good forecasts, but let me venture one: Most readers of this column will eat and drink heavily over the next couple of weeks (as will its writer), and many of us will, on Jan. 1, vow to do better in the future. Can economics provide a little assistance in coping with this annual ritual?
I think it can, and so do three economists at Yale who’ve been helping me out. Professors Dean Karlan and Ian Ayres (who is also a law professor and the author of Super Crunchers), along with Jordan Goldberg, a business-school student, have a check from me for $1,000.
If I do not do 200 push-ups and 200 sit-ups each week, they’ll start sending my money to a charity, $100 at a time. (I chose the hugely deserving D.C. Central Kitchen.) They will shortly offer the same dubious privilege to countless others via a new company, Stickk.com.
It’s a clever business idea and a variant on the old theme of making a bet with a friend that you can lose weight or quit smoking. But it doesn’t fit anywhere in classical economics. The odd, robotic creature that populates traditional economic models does not need an incentive to stiffen its resolve. In fact, “resolve” is not a concept that translates into the standard model of economic behavior.
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