Jerry Seinfeld’s commitment strategy for joke writing

As told to a software programmer:

(Seinfeld) said the way to be a better comic was to create better jokes and the way to create better jokes was to write every day. But his advice was better than that. He had a gem of a leverage technique he used on himself and you can use it to motivate yourself—even when you don’t feel like it.

He revealed a unique calendar system he uses to pressure himself to write. Here’s how it works.

He told me to get a big wall calendar that has a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker.

He said for each day that I do my task of writing, I get to put a big red X over that day. “After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job next is to not break the chain.”

“Don’t break the chain,” he said again for emphasis.

Shakeout says this story is an example of loss aversion in that “the benefit of writing another joke seems small, but as you build up the chain you give yourself something to lose.” Loss aversion doesn’t seem like the appropriate behavioral economic lesson to apply to Seinfeld’s story.

An alternative might be research on differences in decision making when facing isolated options versus sequences. The frame of a sequence typically enables individuals to make more farsighted decisions, which is exactly what happened in Seinfeld’s case. In much of this research – the best of it done by George Loewenstein – individuals typically postpone objectively “better” outcomes until the end of a sequence (like French food versus McDonalds). Though in the Seinfeld story, the sequence itself seems to differentiate the value of initially identical products (a self-produced joke).

Nudge-inspired movie script lines

Philip Frankenfeld imagines:

Scene: Cafeteria with buffet line called Random Placement Cafeteria.

Frank: “We randomly rotate the place of foods on the line to avoid ‘choice architecture’. We’re ‘nonnudgemental’.”

A nudge forum on housing and credit

Jim Heskett of Harvard Business School asks two questions over at HBS Working Knowledge.

1) Can housing and credit be “nudged” back to health?

2) Did human frailty cause this crisis (as Sunstein and Thaler have suggested)?

Readers weigh in here.

Hat tip: Mostly Economics.

Rethinking unemployment insurance: Part I

With 2.7 million more Americans unemployed compared with the start of the year, unemployment insurance has returned to the forefront as a public policy issue. Most of the talk has been about extending unemployment benefits. It may be time, though, for lawmakers to engage in a more comprehensive reform debate – one that includes a proposal by Jeff Kling to alter the structure of unemployment insurance in such a way that recognizes the psychology of losing a job and strengthens the incentives for returning to work.

Kling’s revenue-neutral proposal would reform unemployment insurance by shifting government resources toward protection against especially damaging long stretches of unemployment or permanent effects of job loss, such as lifetime wage reductions. Laid-off workers can remain unemployed for long stretches for two major reasons, one economic and one psychological. 1) They simply cannot find work; 2) They refuse to take lower paying jobs thinking they can find a new one that pays as much as their last.

To create an incentive for workers to clear the psychological hurdle, Kling proposes setting up temporary earnings replacement accounts (TERA) to improve the protection against the effects of long-term unemployment and permanent wage-reduction. The account would be funded by the workers themselves during more prosperous times, and drawn from during periods of distress. Workers could also borrow against the account from future earnings. During periods of unemployment or lower-wage jobs, workers would draw funds from both their unemployment account and more traditional unemployment insurance (UI), which would result in a broader safety net from a similar government budget. While the unemployment accounts would be funded by workers, the unemployment insurance would be funded by firms, as it is currently.

In comparison with UI, use of TERAs should reduce the average amount of time that people spend out of work. Use of TERAs instead of UI increases the price for additional unemployment (at least among those who do not expect to retire with an unpaid loan), because TERA withdrawals would need to be repaid from future income. As a result, the introduction of TERAs may reduce the overall duration of unemployment by 5 to 10 percent.

The duration of unemployment would also be affected by the availability of wage-loss insurance. Individuals considering a job offering a wage below their insured wage level would be more likely to accept it, since the hourly rate of pay would be augmented by wage loss insurance payments. Making work more rewarding should reduce the tendency of some people to become discouraged and to remain unemployed or even stop looking for work. This reduced duration of unemployment is unlikely to be associated with workers taking jobs too rapidly, rather than waiting more patiently for a more productive job match.

Kling’s proposal could also reduce layoffs by firms, which will be explained further in the next post.

The best use for butcher block paper ever

Reader Margo Mueller sends us a great story about choice architecture at a Texas gas station.

During a long road trip between California and Missouri, I stumbled on a gas station on Interstate 40 in Adrian, Texas, that had come up with an ingenious way of protecting the walls of their restrooms. In an effort to reduce the number of times the restrooms needed to be painted, someone came up with the idea to tape sheets of butcher block paper to the walls. The sheets were inside every stall and on the walls in both the men and women’s restrooms. On the top of each piece of torn white paper was written “Please tell us about your trip”. What followed on every sheet were stories about why people were traveling across the country. Some stories were sad, some were happy, some were angry. The whole gamut of emotions was posted on these sheets. (I wish I had a picture.)

The amazing thing was that the real white walls of the restroom were not defaced in any manner, not one piece of graffiti. After asking at the checkout who came up with the idea, the clerk told me that, to clean up graffiti, the owners had been stuck with a painting the walls of the restrooms twice a year. Since they had put the butcher block paper up five years ago, they had never painted the restrooms.Yet they remained clean and sparkling white. Obviously, the management nudged the public for everyone’s benefit.

Who would have thought, libertarian paternalism shining through in both male and female restrooms in Adrian, Texas?

PS The reading was fascinating!
PPS The clerk also told me that the men had cleaned up their language quite a bit in five years. The tone of their scribbles had changed from gross and inappropriate to polite and sincere. Way to go guys!

Accolades for Nudge

You’ll have to excuse a bit of self-promotion, but Nudge has been named a best book of 2008 by the Economist and the Financial Times. We’re delighted.

How the IRS can reduce tax cheating on the same budget

Some psychologists have proposed that humans suffer from an “illusion of control,” in which they overestimate their ability to control risks that they may or may not have much power over. As an example, humans are more willing to bet on dice that they roll themselves than on the same dice rolled by someone else.

How can this finding be applied to public policy? Two law professors have an idea.

Current IRS policy is to select tax returns for an audit after the return is filed. Thus, individuals complete their tax forms while predicting whether they will be audited. But if the IRS announced that it had already selected the tax‐payers it would audit before the returns were filed, then individuals would complete their tax forms while postdicting whether they would be audited. Given the bias, the policy of announcing that certain taxpayers have been selected for auditing before any returns have been submitted would generate more deterrence than the policy of selecting auditees only after the returns have been submitted, holding constant the actual probability of an audit.

From the new paper Behavioral Criminal Law and Economics referencing the original paper Uncertainty Revisited.

Would you run three miles for a digital butterfly?

From Wellness Junction:

Researchers at the University of Washington (UW) and Intel have created a new cell phone application, dubbed UbiFit, to automatically track workouts. The programs display motivational pictures on the phone’s background screen that change the more the user works out.

What kind of motivational pictures? Try a garden.

UbiFit displays an empty lawn at the beginning of the week, and flowers grow as the user works out during the week. Different kinds of workouts yield different colored flowers. Users set weekly workout goals and are rewarded with a butterfly when the goal is met.

All it takes is a few electronic flowers and insects? (A picture is here.) The phones researchers say they test the application over last year’s holiday season and they swear it works. Hey, if flies work for urinals…

Hat tip:
Jeff Sybesma

Inaugural nudge: Leave the little guys at home

That’s the headline from the Washington Post. Maybe the headline writer is a fan of the book.

Officials are banning all strollers and backpacks and make a point of saying on their Web site that “there are no childcare facilities provided to attendees.” If that hint isn’t enough, they suggest that “extra consideration” be taken by those planning to bring children, noting that “a vast majority of attendees will be in standing room sections and should be prepared to be on their feet for several hours.”

They also helpfully point out that the swearing-in ceremony is an outdoor event “that is typically cold — normally 37 F at noon — and occasionally wet.” In other words: Leave the kiddies at home.