by Site Author

It is tempting to put things off. Why write, exercise, or fill out paperwork, when you can put it off until tomorrow? There are lots of distractions and lots of reasons to put off what has to be done.

Well, here’s one way to deal with that problem. You can “pre-commit” to doing the right thing. Take, for instance, the Save More Tomorrow program. Behavioral economists Richard Thaler and Shlomo Benartzi were concerned about low savings rates. People seem to put off saving for retirement, since there are always fun ways to spend the money right now.

So Thaler and Benartzi created a program for workers to pre-commit to save at a later date. Instead of agreeing to give up cash right now, employees signed a contract with their employer that automatically placed a certain portion of their future paychecks, after a raise, into a retirement fund. The program was incredibly popular, and it dramatically increased savings rates.

Such a plan, grounded in behavioral economics, is about pre-commitment. People might be subject to behavioral biases in the present. They don’t make the right choice for themselves right now. But they can make the right choice for their future selves. And so, with a program like this, a policymaker can enable consumers to pre-commit to do the right thing later on.

This kind of intervention isn’t only useful for policymakers, it’s something we can all do on our own. Tim Hartford sits down every evening and jots down a to-do list for the next day. He argues that we are just better at creating a to-do list for our future selves than for our current selves.

Similarly, I write out my gym workouts in advance. Every time I go to the gym, I bring along an index card with my workout routine. In that little way, I pre-commit to actually pushing myself at the gym when I might otherwise take it easy.

Over the past few decades, behavioral economists have been promoting interventions like Save More Tomorrow. They argue that the programs are a new breed of informed, benevolent policy. Perhaps they’re onto something. But the same insights that can inform policy can also inform how we manage our daily lives.