Ideas like paternalistic libertarianism are en vogue these days.  You’ve read about them in books like Nudge, Freakonomics and Predictably Irrational.  It’s all part of the attack of the behavioral economists, a band of economists who believe that traditional economic modeling is based on humans that are fundamentally not human, who don’t behave as humans really, infallibly behave.

A recurring theme amongst this motley crew of academics is that of external motivators.  We could be compelled to save if we’re motivated by gaming (more about savings lottery).  We could speed our check-out experience if there is no wrong way to swipe your credit card.  We could reach our goals if we create a cost for failure (see Dean Karlan’s Stickk.com).  Admittedly powerful ideas.

I signed up on stickk.com and took out a contract against myself.  Once I entered my credit card information I was determined to meet my goal – and did.  But then… I did not exercise once my goal term was over.  Not once.  Without the external motivator, my internal will was weaker than before.  Our intern sent me a Malcolm Gladwellesque story about a bunch of kids who were offered one marshmellow immediately, or two marshmellows a little later on.  Forty years later, they found that the kids who were able to wait were more successful, in school, in stress, and at work.  So, those who were able to delay gratification had greater internal motivation, which served them powerfully throughout life.

I’m not even an armchair behavioral economist, but my own experience and examples like this marshmellow study make me seriously wonder about the implications of relying on external motivators for better behavior.  What happens when there is no more contract against yourself, no more fail-safe point of sale device, no more lottery to elicit your deposit?  I fear the consequences may be worse in the long-run than the immediate benefits.