Nudge of the Week: Future Committing

Ash Navabi Nudge of the Week, Uncategorized December 16, 2017January 10, 2019 1 Minute

Getting people to commit to having a cost right now is very hard. It’s much easier to get them to commit to a higher cost in the future.

This is the principle behind “buy now, pay later” policies.

Another example comes from the Nobel prize economist Richard Thaler. Getting people to save their income now is hard. But getting people to commit to saving their future raises in income is much easier. So instead of saving 10% of your income now, which nobody feels comfortable doing, you commit to saving 50% of any future increase in income.

Published by Ash Navabi

I'm senior economist at Housing Matters, a Toronto-based not-for-profit YIMBY group. In addition to housing policy, I also like to read and write about intellectual property, money & banking, and methodology. Other random things I'm interested in include space, physics, 3D printing, entrepreneurship, the English language, and internet culture. View all posts by Ash Navabi

Published December 16, 2017January 10, 2019

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Published by Ash Navabi