Buy self-constraint at StickK.com

The Yale Economic Review informs me:

stickK.com , scheduled to launch in December 2007, will provide "commitment contracts" that let individuals set a goal, choose consequences for failing to comply, and decide how to verify their progress.  With the options of choosing to lose money every time they fail and designating third-party verifiers to check their success, users will face powerful incentives to meet their goals.

The very smart Dean Karlan and Ian Ayres are behind the idea.  I’ve long predicted this won’t work; one group of potential customers doesn’t really want to change, the other group is unwilling to give up control.  It’s not exaggerating to say that human nature is on the line here, and that if I am wrong this is probably the most important idea you will ever encounter.

Comments

I would love for this to work, but I'm uncertain what's in it for stickK.com. I'm also uncertain of whether these "contracts" would be legally binding, as stickK.com doesn't seem to be bringing any valid consideration to the table.

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So which wouldn’t work, the business model or the concept?

I’ve got real doubts about the model.
It seems like the concept is aimed at the first group mentioned, self-coercion toward worthwhile goals, and might work.

But I’d really like some elaboration on your fish hook line, how the heck would this be the biggest idea ever?

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My guess is that well-off people with confidence in their self-control will use it.

As frup mentioned, choosing a verifier that you couldn't influence is important, as is choosing an easy measurement. Tim Harford has been using it to make himself do 200 press-ups and 200 sit-ups each week (see here). But he could probably just lie about having done them if he didn't want to lose his money.

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I fail to see the big deal. Weight Watchers charges $14 for every meeting that you are above goal weight or if you haven't attended a meeting in a month.

Since their model has no thermonuclear war option ($1000 single payment.) it is a more realistic incentive (a la inner economist) for contracts that people might be willing to enter. I for instance was willing to bet $14 per week that I could lose 20 lbs (the easy part) and keep it off indefinitely (the hard part). But I doubt I'd be willing to put all that money on the line for one weigh in, say, Jan 2nd.

Also for the second part of weight loss---keeping it off---when do you trigger the nuclear bomb? All incentive is then lost. I've paid my $1000, might as well put the treadmill on Craig's list and check out Tyler's best ethnic restaurants in the DC area nightly.

To be sustainable---as opposed to "fit into the wedding dress for the big day" type events---you need death by a 1000 cuts types of bets rather than a nuclear option.

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These guys just ripped off what weight watchers has done for years. Nothing smart about that.

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Where does the money you lose go? One obvious possibility is "to charity", but maybe that interferes with the supposed negative incentives too much. In fact, maybe the money should just be withdrawn from the bank and burned. Or maybe it should be sent to someone you hate. I trust they've thought of this, but I'm curious to see what they'll do...

I for one am likely to try something, if the details look reasonable when the site goes live.

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This is a totally valid concept, provided that the people dedicating money are actually striving toward actual goals. I mean, what if I set a goal to never eat McDonalds? Would they know that I never eat there anyway? If they dont, this is easy money for me.

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Kid Marine, who says it's a two-way bet? Why would they pay you?

Also,

Stephen King wrote a short story called Quitters, Inc (from Night Shift) about muscularly enforced commitment contracts
[plot synopsis with major spoilers]

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At last, an all-purpose commitment device for the sophisticated hyperbolic discounters of the world! If they do a good job setting it up (keep the hassle low, etc), I believe there will be times I will gladly participate. In response to Tyler's comment about this not working, I think there is a large enough group of people who really want to change and recognize that the only way they can is by giving up short term control in return for long term control. Committing to these things is just giving up a level of control which many people realize they don't really want to have.

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Emerson is spinning in his grave.

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Building on mk's comments, I think if I were to take such a bet, I'd probably want to make it so that if I failed to meet my commitments the money would to go to the BNP, or the National Front, or some other equally unsavoury organisation. I'm fairly sure the thought of funding them would be significantly more of a disincentive than the thought of funding Amnesty (or whatever other charity I chose).

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Your blog is mentioned in this article - Good Job!

http://www.thetechbrief.com/2008/02/20/the-secret-of-success-revealed/

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This I recognise is gentle...but I have discovered that the fact that a 2 euro coin is real to me and I know what I can get for it in terms of goods/services and that times 10 it comes to 20 euro it serves as a break.

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