Markets in self-constraint, a continuing series

by on September 2, 2008 at 3:29 pm in Economics | Permalink

Peter Risager, a loyal MR reader, relays the following to me:

A Danish chain of gyms is now offering membership free of charge, with the only caveat that you have to show up, in order for the membership to be free. If you fail to show up once per week you will be billed the normal monthly membership fee for that month. This should solve the problem with incentives that gym-membership normally carries – there is suddenly a very large (membership is around 85$ per month) incentive to show up each week.

He offers also a link in Danish.

soupy sales September 2, 2008 at 4:08 pm

First!

liberalarts September 2, 2008 at 4:12 pm

Kind of like the old book and cd clubs, except you can’t mail in your card to avoid the charge.

TheophileEscargot September 2, 2008 at 4:19 pm

But what about the incentives for the gym to provide a good service and environment?

They should have a soundtrack with very few songs constantly looping around. On a first visit, it will look good, but the annoying repetition will keep people away, maximizing their revenue.

Melpomene September 2, 2008 at 4:23 pm

By the way, your comment form mentions “automated robots” but this is a pleonasm, because robots are by definition automated. You should change it to either robots or automatons.

Anonymous September 2, 2008 at 4:34 pm

This is more or less the business model of credit card companies. Procrastinators and deadbeats subsidize the smugly virtuous.

Anonymous September 2, 2008 at 4:47 pm

The “automated robots” in question are in fact humans in India: see Inside India’s CAPTCHA Solving Economy (slashdot.org). They are paid a mere $2 per thousand code strings entered. Surely worthy of an MR post in its own right… oh wait, you already did.

Oh, and “pleonasm” is one of my favorite words, undeservedly far more obscure than its flipside “oxymoron”. Please do your part to embiggen pleonasm’s cromulence. Maybe automated robots could be used to spam it in blog comments.

Anonymous September 2, 2008 at 5:10 pm

This is more or less the business model of credit card companies. Procrastinators and deadbeats subsidize the smugly virtuous.

I’m not smugly virtuous. I very much appreciate the procrastinators and deadbeats. Really!

Anittah Patrick September 2, 2008 at 6:25 pm

Actually, as a former credit card marketing executive, I can assure you that procrastinators and the merchants that accept said credit cards are the ones that are subsidizing the deadbeats and smugly virtuous.

If you’d like to disagree, I’m happy to have a dance-off on the matter.

Jeff H. September 2, 2008 at 7:52 pm

I hate to be cynical, but for some reason I don’t think the gym would offer this deal if they expected people to show up regularly.

I could also see it as way for the gym owners and/or members to signify a sort of hardcore devotion, but that may be too American of an explanation.

k September 2, 2008 at 8:09 pm

http://volokh.com/posts/1220398359.shtml
Markets in everything , self restraint

Sune September 3, 2008 at 4:46 am

This campaign has a pretty high fixed entry cost compared to competing centers. $90 to become a member and get a card and then another $90 in deposit. Usually it only costs like $40-50.

Peter September 3, 2008 at 10:36 am

I think if everyone who is signed up at a gym actually showed up regularly, it would be so crowded to the point of being unusable.

That’s why you’ll never see a sign in a gym reading “No curls in the squat rack.” The douche bags who curl in the squat rack generally don’t show up regularly, and therefore don’t burden the gym’s facilities. In contrast, the sort of people who actually squat in the squat rack go to the gym all the time, and therefore do burden its facilities.

Vizen September 3, 2008 at 7:49 pm

Im pretty sure I could up this attendance except for 2-4 weeks a year and I live near a center. Right now I pay $60 a month, 2 month binding period. I’m mostly deterred from joining this new place because of the high entry cost, long binding period and uncertainty of quality/crowdedness.

ted_vanderbilt September 4, 2008 at 7:48 pm

This looks to me like the daycare centers in Israel that started charging fines to parents who showed up late. The result was more, not less, tardiness, as parents now felt that they were providing compensation for their irresponsibility.

Likewise, gym patrons who’d otherwise feel guilty for being too lazy to go work out can now relieve their consciences by paying a price for their shortcomings.

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