Monday, March 11, 2013

Commitment versus fantasy

In "How Economics Can Help You Lose Weight" Adam Davidson in the NYtimes writes that
"During our conversation, Schelling said that he eventually applied this theory to his struggle to quit smoking. He wanted to think of it as a battle with two choices — quit or die of cancer — but his nicotine-addled brain kept coming up with a third option: sneak one more cigarette and quit later. Of course, later never came. (“I was quitting for 20 years,” he said.)"


"But aligning financial incentives with people who actually want to lose weight is not the best business strategy. John LaRosa, an analyst at Marketdata Enterprises, said Robard was one of a handful of companies, like Health Management Resources and the Center for Medical Weight Loss, that competed for a share of a relatively small market. Altogether, these meal-replacement clinics make around $400 million a year. Diet books and exercise videos, by contrast, make nearly three times as much. The real money, of course, is in the third, easy, magical-option category. All those diet bars, green-coffee-bean-extract capsules and other supplements earn close to $3 billion a year. Diet soda alone is a $21 billion business. Game theory suggests that if you want to truly change your behavior, commit and close off those options. But as basic marketing makes clear, the real money is still in the fantasy business."

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