« Adjustment Costs and Leap Seconds | Main | I had to Walk Barefoot for Two Miles in the Snow to Buy a House »

Thursday, December 29, 2005

Strategic Egonomics

Virginia Postrel of www.dynamist.com writes about the value of precommitment:

A Nobel Winner Can Help You Keep Your Resolutions, by Virginia Postrel, Economic Scene, NY Times: Why make New Year's resolutions? ... why wait until Jan. 1? Why not do it today? ... New Year's resolutions help people cope with some of the most difficult conflicts human beings face. So argues ... Thomas C. Schelling, who shared this year's Nobel in economic science ... Professor Schelling ... is famous for his work on conflicts between nation-states, particularly those with nuclear weapons.

One of his best-known ideas is "precommitment." One party in a conflict ... can often strengthen its strategic position by cutting off some of its options to make its threats more credible. An army that burns its bridges, making retreat impossible, is a classic military example. ... In the early 1980's, Professor Schelling applied similar analysis to individuals' internal struggles, seeking to develop what he called "strategic egonomics, consciously coping with one's own behavior, especially one's conscious behavior."

The problem, he suggested, is that pretty much everybody suffers from a split personality. One self desperately wants to lose weight or quit smoking or run two miles a day or get up early to work. The other wants dessert or a cigarette, hates exercise or loves sleep. Both selves are equally valid, and equally rational about pursuing their desires. But they do not exist at the same time.

"What I have in mind is an act or decision that a person takes ...[based upon] preferences [that] differ from what they were earlier..." he wrote ... "If the person could make the final decision about that action at the earlier time, precluding a later change in mind, he would make a different choice ..."

New Year's resolutions help the earlier self overrule the later one by raising the cost of straying. "More is threatened by failure than just the substance of the resolution: one's personal constitution is violated, confidence demoralized, and the whole year spoiled. At least one can try to make it so," ... As many a broken resolution demonstrates, those consequences often are not a big enough deterrent. To make success more likely, Professor Schelling's work suggests a few additional strategies. One is a mild precommitment: not keeping sweets or tobacco in the house, for instance. At the very least, this step forces you to delay indulgence ... and allows time to recover your resolve.

Another approach is to use bright-line rules, which make it harder to cheat through clever reinterpretation. That may explain why many people find it easier to eliminate whole categories of food, like carbohydrates, rather than simply to cut back on calories. "[Z]ero is a more enforceable limit on cigarettes or chewing gum than some flexible quantitative ration," Professor Schelling wrote. He once resolved to smoke "only after the 'evening meal.' " That rule "led to tortured reasoning Thanksgiving afternoon, or flying west across the Atlantic with perpetual afternoon, and it stimulated lots of token sandwiches on leaving the ski slopes to drive home."

For those who cannot face the prospect of an eternity without a favorite indulgence, there is the strategy of delay. ... you give yourself permission to smoke or drink or eat chocolate cake again within a specified time - say, three hours - after deciding to go off the wagon. Like having to go out to buy supplies, this strategy allows time once again to resolve not to indulge. ...

A slight variation allows a third "self" to mediate between the two in conflict by enforcing a prearranged deal: ... for instance ... a new dress in exchange for losing 10 pounds. This system works, however, only on two conditions. First, the incentives have to be strong enough. Then, ... "the 'someone' who wants to turn off his alarm with his eyes closed has to believe that another 'somebody' will later have the fortitude to administer the punishment or deny the reward, when 'they' are really all the same person."

Just do it tomorrow.

    Posted by on Thursday, December 29, 2005 at 01:16 AM in Economics | Permalink  TrackBack (0)  Comments (2)


    TrackBack URL for this entry:

    Listed below are links to weblogs that reference Strategic Egonomics:


    Feed You can follow this conversation by subscribing to the comment feed for this post.