A dozen years ago, Florida-based psychologist Roy Baumeister started a series of experiments on self-control. A typical one went like this: Hungry subjects were presented with a bowl of radishes and a plate of freshly baked cookies. Baumeister instructed some of the subjects to help themselves to as many cookies as they wanted; the rest were told they could only nibble on the radishes. After a while, each subject was given a series of geometric puzzles to solve—not knowing, of course, that they were unsolvable.
The point was to measure how long they'd keep at it before giving up. The radish-nibblers, it turned out, caved quicker than the cookie-eaters. In fact, Baumeister's experiments consistently found that subjects who were forced to exercise self-control were the first to quit when faced with a new challenge. They were also more likely to indulge in something else (you'll understand this phenomenon if you've ever quit smoking, only to gain 15 pounds thanks to overeating). His conclusion: We have limited reserves of willpower. Exercising it is tough, and once we've reached our limit, just about any temptation can overpower us.
That is, unless there is something else—say, a punishment—to lead us not into temptation. Where no real punishment exists, we'll often arbitrarily institute one: Economists call these "commitment devices"—any type of restraint that binds us to a future course of action, protecting us from our own lack of self-control. A classic example: automatic monthly bank withdrawals earmarked for your RRSP; this arrangement allows us to save for retirement and foils any temptation to spend the cash now and wind up destitute later. Think of it as using economics to help us become the kind of people we want to be.
Entrepreneurs have long known that managing other people's self-control is a rich source of profit (think Jenny Craig). With the Internet, it's becoming even easier to outsource your willpower. The company leading the online charge is StickK, the brainchild of Yale economists Dean Karlan and Ian Ayres. The idea for StickK was inspired by Karlan's struggle to lose weight as a post-grad at MIT. Understanding how powerful a motivator money can be, he and a colleague negotiated weight-loss contracts with one another. At stake was half their annual income. Karlan lost 38 pounds. He also pocketed $15,000 when his buddy fell off the weight-loss wagon.
StickK allows you to wager as much money as it will take to help you reach your goal—the most common ones being to get in shape, quit smoking, lose weight or run a marathon. (Other suggestions include: learn yoga, stop littering, call your mother every week, or learn 10 Spanish words a day.) Once you've signed a contract, you designate a neutral referee to track your progress. If you fail, the money goes to an individual or charity of your choosing. (StickK doesn't profit if you fail—the site is ad-driven.) In an ingenious twist, for a little extra incentive you can name an organization you hate as your beneficiary. The idea is catching on: Though StickK was founded just a few months ago, over 1,000 customers have signed contracts with the company, and it has raised over $1.2 million (U.S.) from investors.
For customers of Mirs Communications, an Israeli subsidiary of Motorola, there's more at stake than a few bucks: their souls. The company markets cellphones to ultra-Orthodox Jews that block them from calling thousands of forbidden numbers, such as sex-chat lines. Under its kosher mobile plan, calls to regular numbers are nearly five times as expensive as calls to kosher ones, and on the Sabbath, when Orthodox Jews are supposed to refrain from using technology, calls cost 100 times more than they do during the week.
