Negative incentives ensure commitment

For the past two hours, instead of writing this column, I’ve been lurking on Gawker and watching Lost. The looming deadline just wasn’t incentive enough to bang out these 650 words. But what if there was money at stake — say, $100?

So I signed myself up at Stickk.com, a new venture developed by Ian Ayres, a professor at the Law School, and Dean Karlan of Yale’s Economics Department. Here’s how it works. If you want to get something done — lose weight, run a marathon, stop picking your nose (their suggestion), write a column — you take out a “commitment contract.”

By doing so, you essentially put your money where your mouth is. Suppose, for instance, you commit yourself to quit smoking within a month. If at the end of the month, you’re still smoking, Stickk will keep the money you deposited. To make it even more interesting, whenever you fail, they have the option of giving your money away to a cause (or person) you really hate. One of their “anti-charities” is the National Rifle Association.

This twist on traditional ideas of incentives, or what Ayres calls “tying your hands,” isn’t anything new. When Cortez arrived in the New World, he feared his conquistadors wouldn’t fight as hard if they knew they could turn back. So he burned all of his ships, and guess what? He and his 600 men managed to take down the entire Aztec empire.

But before Stickk came along, it was just about impossible to come up with an airtight commitment contract. Sure, you could deposit some money with your roommate and promise him not to return it unless you make it to all of your nine o’clock classes this month; but chances are, you’ll still sleep through the alarm, since you’ll assume you can get your money back with enough hassling.

“The stick is mightier than the carrot,” Ayres writes in a column for Forbes. “People hate losing their own money even more than they love gaining a windfall of the same amount.”

By leveraging this loss aversion, Stickk could revolutionize how we behave. Knowing that quitting smoking will improve your health (a positive incentive) is much less effective than knowing that to fail would mean seeing your money go to the NRA (negative incentives). This quirk about how humans irrationally frame choices is a fundamental pillar in the hot field of behavioral economics.

Ayres said to me that he lives by his own mantra. He’s hired a corps of “personal naggers,” aka students, to force him to run in the mornings, and he has lost weight by signing up for a commitment contract. Although Stickk doesn’t appear to be very sticky when it comes to Web traffic, Ayres said they’ve already gotten $50,000 in deposits from contracts and that preliminary data suggest the success rate is high.

That’s quite promising, considering 95 percent of smokers alone fail to quit on their first try. Now it seems maybe they’ve been doing it wrong the whole time. As Alfie Kohn points out in his book, “Punished by Rewards,” traditional reward systems that serve as positive reinforcements are often counterproductive.

“People actually do inferior work when they are enticed with money, grades or other incentives,” he wrote. “The more we use artificial inducements to motivate people, the more they lose interest in what we’re bribing them to do.”

Of course, motivating yourself using the stick rather than a carrot may have its downsides. Somehow, a nice jog in the park just doesn’t seem as refreshing when you know that dropping below a seven-minute mile means forking over cash to your archenemy. Then again, my commitment contract on Stickk did help me finish this column.

Jerry Guo is a junior in Timothy Dwight College. His column runs on alternate Fridays.

Comments