Slate's Bizbox
procrastination: A brief history of wasting time.

Like There's No TomorrowHow economists think about procrastination.

By Ray Fisman
Posted Thursday, May 15, 2008, at 6:42 AM ET

Read more from Slate's special issue on procrastination.

(Continued from page 1)

For those who don't have the discipline for such approaches, economists have begun to devise some clever ways of lending a hand. (Where there's a human need, there is surely a way of profiting from it in our glorious free-market economy.) A couple of Yale economists, Dean Karlan and Ian Ayres, have established a company that forces its customers to think about their future selves. Their outfit, called Stickk, allows you to buy "Commitment Contracts," which require the completion of a specified task that you might otherwise put off (finishing a paper, quitting smoking, losing weight). When you sign the contract, you hand over a sum of money and get it back only if you keep your commitment by a particular date. So, rather than having a vague and distant motivation for finishing that dissertation, there's the much more immediate cost of seeing your $1,000 disappear. So is Stickk's business model to bet against our ability to resist procrastinating? Not quite. Stickk makes its money from advertising, not from its customers. If you fail to live up to the terms of your contract, your money goes to a randomly selected charity. Or, if you want some extra motivation, you can have your commitment payment go to an "anti-charity" of your choosing. They cater to all tastes—both Americans United for Life and the Pro-Choice America Foundation are possible recipients.

But what if you don't even realize you have a procrastination problem? Richard Thaler and Cass Sunstein argue in their recent book, Nudge, that a gentle paternal push might be needed here and there, for people who don't fully understand just how much they're shortchanging their future selves. One such nudge, designed by Thaler and Shlomo Benartzi, deviously turns procrastination on its head. Their program is designed for people who keep putting off saving for their future because they're too busy spending money in the present. Save More Tomorrow is an employer savings program that Benartzi and Thaler have already field tested to remarkable effect, raising savings rates among participants nearly fourfold. Employees enrolled in the program decide ahead of time that a portion of future salary increases will be allocated to retirement savings. For example, you might commit 10 percent of your next raise to the savings program, and 20 percent of the one after that, and so on. Since the program isn't asking us to take away money from our present, spendthrift selves, we're more inclined to participate—I get to help the future me, at no cost to the present me. Once enrolled, participants can always opt out and return to their spendthrift ways. But here, finally, procrastination serves as a force for good. Since the opt-out decision is always available but may in fact take a little effort to take care of, why not just do it tomorrow?

Economists have been studying time-inconsistent preferences for decades. But Save More Tomorrow and Stickk are at the vanguard of a new movement to bring these ideas out of the lab and into the field. Indeed, depending on the outcome of the November election, we may soon see similar approaches embraced by the federal government (which of course already looks after our long-term interests through programs like Social Security). Thaler and Sunstein are both informal advisers to the Obama campaign and might nudge a President Obama to adopt policies that would help Americans put down the doughnut and start spending some time thinking about that too-often-neglected constituency—our future selves.

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Ray Fisman is the author of Economic Gangsters: Corruption, Violence, and the Poverty of Nations (with Edward Miguel). He is the Lambert Family professor of social enterprise and research director of the Social Enterprise Program at the Columbia Business School.
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