Resisting Temptation

Resisting Temptation

Back when he was a graduate student, Thaler was hosting dinner for some guests (other then-young economists) and put out a large bowl of cashew nuts to nibble on with drinks. Within a few minutes it became clear that the bowl of nuts was going to be consumed in its entirety and that the guests might lack sufficient appetite to enjoy all the food that was to follow. Leaping into action, Thaler grabbed the bowl of nuts, and (while sneaking a few more nuts for himself) removed it to the kitchen, where it was put out of sight.

When he returned, the guests thanked him for removing the nuts. The conversation immediately turned to the theoretical question of how they could possibly be happy about the fact that there was no longer a bowl of nuts in front of them. (You can now see the wisdom of the rule of thumb mentioned in Chapter 1 about a cap on the proportion of economists among attendees at a dinner party.) In economics (and in ordinary life), a basic principle is that you can never be made worse off by having more options, because you can always turn them down. Before Thaler removed the nuts, the group had the choice of whether to eat the nuts or not—now they didn't. In the land of Econs, it is against the law to be happy about this!

To help us understand this example, consider how the preferences of the group seemed to evolve over time. At 7:15, just before Thaler removed the nuts, the dinner guests had three options: A: eat a few nuts; B: eat all the nuts; and C: eat no more nuts. Their first choice would be to eat just a few more nuts, followed by eating no more nuts. The worst option was finishing the bowl, since that would ruin dinner. This means that their preferences were A > C > B. But by 7:30, had the nuts remained on the table, the group would have finished the bowl, thereby choosing Option B, which they had ranked last. Why would the group change its mind in the space of just fifteen minutes? Or do we really even want to say that the group has changed its mind?

In the language of economics, the group is said to display behavior that is dynamically inconsistent. Initially people prefer Option A to Option B, but they later choose B over A. We can see dynamic inconsistency in many places. On Saturday morning, people might say that they prefer to go for a run later in the day, but once the afternoon comes, they are on the couch at home watching the football game or binge-watching the entire season of a new show.

How can such behavior be understood? Two factors are relevant: temptation and mindlessness. Human beings have been aware of the concept of temptation at least since the time of Adam and Eve, but for purposes of understanding the value of nudges, that concept needs elaboration. What does it mean for something to be "tempting"?

The American Supreme Court justice Potter Stewart famously said that although he could not define pornography, "I know it when I see it." Similarly, temptation is easier to recognize than to define. And temptations are highly personal. Thaler is a sucker for a good bottle of wine and has trouble resisting just one more small glass from a special bottle. Sunstein hates the stuff, but drinks Diet Coke in large quantities. For us the crucial fact about temptation is that people's state of arousal varies over time.

To simplify things, we will consider just the two end points: hot and cold. When Sally is very hungry and appetizing aromas are emanating from the kitchen, we can say she is in a hot state. When she is thinking abstractly on Tuesday about how much food to eat at dinner on Saturday, she is in a cold state. Late Saturday afternoon, the salad she planned to eat for dinner back on Tuesday now seems skimpy and should perhaps be augmented with a pizza. We call something "tempting" if we consume more of it when we are in a hot state. None of this means that decisions made in a cold state are always better. For example, sometimes we have to be in a hot state to overcome our fears about trying new things. Sometimes dessert really is delicious, and we do best to go for it and hit the gym the next day. Sometimes it is best to fall in love. But it is clear that when we are in a hot state, we can often get into a lot of trouble.

Most people realize that temptation exists, and they take steps to overcome it. The classic example is that of Ulysses, who faced the peril of the Sirens and their irresistible song. While in a cold state, Ulysses instructed his crew to fill their ears with wax so that they would not be tempted by the music. He also asked the crew to tie him to the mast so that he could listen for himself but be restrained from submitting to the temptation to steer the ship closer when the music put him into a hot state.

Thaler removing the cashews and Ulysses tying himself to the mast are examples of commitment strategies. (A reminder: Calling this the Final Edition of this book is a commitment strategy. Really.) Such strategies work well if the risk of submitting to temptation can be anticipated, and removing the temptation is feasible. But in many situations we do not correctly forecast a pending self-control problem because we underestimate the effect of arousal. This is something the behavioral economist George Loewenstein calls the "hot-cold empathy gap," a concept that has heavily influenced our thinking on this subject. Loewenstein's key insight is that even if people realize that they behave differently when aroused, they underestimate the strength of the effect. When in a cold state, we do not appreciate the extent to which our desires and our behavior will be altered when we are "under the influence" of arousal. As a result, our behavior reflects a certain naivete about the effects that context can have on choice.

Consider Luke, who is on a diet but agrees to go out for a business dinner, thinking that it will be easy enough to have just one cocktail and no dessert. But then the host orders a bottle of wine and the waiter brings by the dessert cart, and all bets are off. Or Janet, who plans to go into a department store when it is having a big sale and just see whether it has something on sale that she really needs. Janet ends up with shoes that have no obvious use but look good, and they hurt only a bit (but were 70 percent off). Similar problems affect those who have problems with smoking, alcohol, a compulsion to exercise, and shopping as "therapy."

Self-control problems can be illuminated by thinking about an individual as containing two semiautonomous selves: a farsighted "Planner" and a myopic "Doer." You can think of the Planner as speaking for your Reflective System, or the Mr. Spock lurking within you, and the Doer as heavily influenced by the Automatic System, or everyone's Homer Simpson. The Planner is trying to promote your long-term welfare but must cope with the feelings, mischief, and strong will of the Doer, who is exposed to the temptations that come with arousal. Research in neuroeconomics has found evidence consistent with this two-system conception of self-control. Some parts of the brain get tempted, and other parts are prepared to enable us to resist temptation by assessing how we should react to it.1 Sometimes the two parts of the brain can be in severe conflict—a kind of battle that one or the other is bound to lose. (We are not trying to make controversial claims here about neuroscience; the brain is complicated.)