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now or

later?

Most of our actions have costs and benefits at different time points. Some actions have immediate benefits and future costs: watching another episode of that series we love now and leaving the chores for later, taking on debts to please ourselves and then paying interest, or pretending that the doctor did not alert us about the sugar levels in the last checkup, keeping up a diet rich in sugar and carbohydrates. Other actions have immediate costs and future benefits: running 5k, going to all your medical check-ups, or studying hard for an important test. Immediate rewards seem disproportionately higher than future rewards. This phenomenon is known as time discount.

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The fact is, we value current benefits more than future ones. Psychologists and behavioral economists call this peculiarity of human behavior present bias or impulsivity, something that happens to all of us. If present bias were the only way to make decisions, we will always choose to enjoy immediately rewarding activities now and save costs for later. Of course, when the time comes to decide once more we would postpone the costs again. And so on and on. But we know that there are ways to escape present bias. Let’s see one way that happens.

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Behavioral economists distinguish between people who are aware that future benefits are less attractive, and those who assume that when the time comes, will be able to bear the costs. The former are called "sophisticates" and the latter "naivetes." Everyone suffers from present bias, but the former group is aware of it. For this reason, the sophisticated sometimes choose to restrict their future selves so that they can no longer indulge themselves.

A commitment device is a formal or informal contract that has some cost in the present and that we assume in order to put limits on our future actions. The cost can be mostly psychological or economic. Psychological cost means that breaking the contract will bring guilt or shame. For example, we promise our partner that we will not throw vegetables in the trash during the next month. We brush our teeth early to avoid snacking later, or we drink water before going to bed to make sure we will get up early in the morning. 

Economic costs may or may not be monetary. Professors at some universities offer a course format that forces students to turn in assignments on time (and if they don't make it, grades will be punished) instead of being able to defer turnarounds until the last day. Buying a bitter-tasting nail polish costs some money, and we do this to avoid falling into the habit of biting our nails. At the extreme of the spectrum, there are companies that receive money that is only paid back if the objective we have set is met within the term we define. If we can't keep our word, they donate the money. These forms of commitment with an associated economic cost are known as hard commitments.

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Although the distinction between sophisticated and naivete is theoretical, field studies show that only a small portion of people agree to use commitment devices. And other studies show that they are not foolproof. Let’s go over a couple of examples that address these points.

In one field experiment, a group of 2000 smokers was offered to open an account where they could transfer a desired amount of money every month. If on the sixth month they passed a urine test for nicotine, they would be returned the money, otherwise, money would be forfeited to charity. Only 11 % of those offered the product accepted to open the account. People who were offered the product were overall more likely to quit smoking (about 5 percentage points more likely). Those who deposited money more often or in bigger amounts had even greater chances of success. Even though these numbers show that just a small proportion of smokers want to accept a hard commitment device to stop smoking, these values aren’t bad compared to other cessation products. 

Soft commitments can be achieved in the absence of monetary transactions. In a study carried to evaluate the effect of public commitment on weight loss , participants were randomly assigned to one of three conditions: no commitment, short term or long term (the weekly weights of the participants of these two latter groups were publicly displayed for half or all the treatment period). As in the previous study, the experimental groups showed better outcomes. In these cases, while people in the control group were able to achieve a weight loss corresponding to 90% of their goal, people in the experimental groups were able, on average, to fully achieve their goal. Interestingly, the effect depended on a psychological trait known as susceptibility to normative influence. That is, the more you care about what others think, the more effective the public commitment is.

We still have a lot to learn in order to design better commitments. And even thogugh they are not bulletproof, commitments are an interesting option to include in the behavioral designer toolbox. 

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