Businesses are helping people make better decisions by offering them a potential punishment if they make poor choices. And customers who are aware of their own weak will are taking advantage of the opportunity.
Like Odysseus, who asks his crew to tie him to the mast as they pass the seductive and deadly Sirens, we sometimes need external constraints to triumph over temptations that run counter to our self interest.
One business offering individuals the opportunity to punish themselves is called StickK, as in "stick to your goals." Created by two Yale professors, the website offers "Commitment Contracts" that obey two well-known laws of behavioral economics:
1. People don't always do what they claim they want to do.
2. Incentives get people to do things.
Commitment contracts work by asking an individual to first define their goal—lose weight, quit smoking, exercise more often, etc.—and then put a little money down, deciding what happens to the money depending on whether the goal is achieved or not. Success may result in the money going to a charity the person agrees with while failure results in money going toward a charity that falls afoul of the person's politics.
This scenario, where someone chooses the punishment of giving to a charity they don't agree with, is the most effective way to achieve goals, according to StickK's statistics. Choosing a possible punishment successfully incentivizes people 87.1 percent of the time. That compares to an 82.8 success rate with positive reinforcement alone, and a 42.7 success rate when there are no stakes involved in meeting a goal.
Duke behavioral psychologist Dan Ariely, author of "Predictably Irrational: The Hidden Forces that Shape Our Decisions", discusses what makes humans so unable to act in their self interest:
Read more at the New Yorker
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