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Tyler and I Have a New Business
Mike Moffatt has signed up with Stickk.com to try to lose some weight and he wrote to Tyler and myself.
I need to find people to give the money to if I fail, so I thought I'd ask the Economics blogging community for help. If you agree then if I fail at my goal, I will pay Marginal Revolution, or the charity of your choice, $100.
Here is my response to Mike:
Hmmmm....I am not sure whether to be pleased at the prospect of a free $100 or upset that you consider $100 in our hands to be such good motivation! Speaking personally, however, I understand the difficulty of losing weight thus I want you to know that if we receive the $100 we will not send it to India, we will not give the money to cancer research, we will not give the money to any cute animals instead we will use your money to squash the poor, to fight against universal health care, and to gas up our Hummer. Moreover, we will do this while drinking fine wine, smoking cigars, eating foie gras and laughing uproariously.
There that ought to help.
If there are other left-wingers out there who would like more motivation to accomplish their life goals then do know that Tyler and I are here to help.
Posted by Alex Tabarrok on February 27, 2008 at 07:45 AM in Economics | Permalink
Comments
This is hilarious. :D
Posted by: Nossa at Feb 27, 2008 8:16:55 AM
Ummm... Since Mike seems to think of cash first as a motivation, he may well be a right-winger.
Posted by: Charlie at Feb 27, 2008 8:17:45 AM
foie gras = pièce de résistance
Posted by: shawn at Feb 27, 2008 8:17:58 AM
The really funny part is that Mike has completely forgotten to consider your incentives - you would gain by his failing! What's the ROI for giving him the gift of a membership in the jelly donut of the day club?
Posted by: Ironman at Feb 27, 2008 8:31:38 AM
I have actually done a similar thing with my girlfriend. If I don't meet my stickk.com weight loss goal, she's going to donate my $100 to a political candidate (of her choice) who I hate. The possibilities are endless and motivation is great.
Posted by: Doug at Feb 27, 2008 8:58:32 AM
Great! Fun post!
Posted by: indiana jim at Feb 27, 2008 9:24:36 AM
Is this hummer a sort of corporate vehicle, owened by Marginal Revolutions as an entity, or do the two of you own a hummer jointly in your own name? I sort of hope it's the former, and that it has your official logo and the like painted on the side.
Posted by: Matt at Feb 27, 2008 9:38:27 AM
Matt: Look at it this way... seeing what the resale value of a 2005 Hummer H2 would be, all it would take would be about 250 of us to fail to meet a weight loss goal (or one very unlucky person to fail 250 times) for Alex and Tyler to do something like that :)
Posted by: Michael Fisk at Feb 27, 2008 10:17:40 AM
Hey, Dick McKenzie wrote in the January 4, 2008 WSJ about his having "heeded the suggestion of Tyler Cowen" and "contracted with a friend to pay her $500 If I had lost nine pounds at the end of 10 weeks." Dick said it worked, and he certainly is no left-winger. The title of Dick's article: "Dieting for Dollars."
Posted by: Norman at Feb 27, 2008 10:25:57 AM
Ah, nobody understands incentives like an economist. I'll have to use this as an example next time I teach my political economy class.
Posted by: James Hanley at Feb 27, 2008 10:57:32 AM
As a leftie, I insist on more specificity. Exactly what methods are you going to use to quash the poor which you aren't already using? I'd insist on some new and innovative increment of quashing. As best I can tell, Tyler already spends his life eating good food, drinking fine wines, etc. so that's no incentive at all.
Posted by: Bill Harshaw at Feb 27, 2008 12:27:27 PM
Alex - you and Tyler know Ian; you guys should prevail upon him to make the charity selection transparent at StickK, and (to the extent possible) to force users to select charities they hate (e.g., Concerned Women for America or for feminists, the ACLU or Greenpeace for right-wingers, etc.)
It's clear to everyone that having money go to a cause you despise is a much more serious deterrent than having it do something you think should be done anyway -- and over time, from the perspective of stickK, the donations should net out (more or less) over the political spectrum anyway, so I have no idea why they are watering down the good idea by sending money to "charity".
Someone should lean on Ian hard about this, and it shouldn't be some random guy who reads econ blogs.
Posted by: jeh at Feb 27, 2008 12:34:30 PM
Bill,
unless you care about losing you're money that you could be giving to the poor, or better yet, the government. ;)
Posted by: at Feb 27, 2008 12:51:22 PM
I love the idea of stickK.
Here is what I'm wondering: What would a fusion of prediction markets and stickK look like? Skeptics could bet on certain contracts succeeding or failing, with the creator of the contract having "bet" on success. This would allow a successful contract to actually net a gain, depending on how likely bettors (aka insurers) thought it was to succeed. Some common data formatting could be used so that insurers could computationally estimate the chances of a contracts' success.
Sadly, the unintended consequences of gambling prohibitions have ruined many more possible businesses, and Internet fraud would reduce the profit opportunities significantly.
Posted by: Grant at Feb 27, 2008 1:19:39 PM
I mentor high school students through a group called Community for Youth. One of the things we do to help them make their goals is to get them to "ante" something. Like in poker. They get it back if they make their goal. They pick what to give up, but they don't get to give it to someone they like if they lose. One of the other mentors has a weight-loss goal. I have in my wallet a check she wrote to a Republican gubernatorial candidate (she's a rabid Democrat) for $250. If she doesn't make her goal, I drop it in the mail. Not only will she be contributing to something she doesn't like, she'll be on all their mailing lists.
Posted by: King Rat at Feb 27, 2008 1:38:23 PM
Thanks for the discussion everyone.. I'm getting a kick out of this!
"Ummm... Since Mike seems to think of cash first as a motivation, he may well be a right-winger."
Nah, just a Scottish-Canadian.
I spend an unusual amount of time obsessing about property rights and externalities. I'm not sure what that makes me, ideology wise.
"What's the ROI for giving him the gift of a membership in the jelly donut of the day club?"
I have celiac disease and can't eat wheat. So the ROI, in that case, would be very low.
But if anyone wants to send me chocolate, I'll give them my mailing address.
Anyhow, I've posted the exact details of the bet on the About site.
Posted by: Mike Moffatt at Feb 27, 2008 2:58:01 PM
A couple of years ago, the heads of two prominent think tanks in DC had a weight-losing bet of $1,000 for each to lose 20 lbs. If one person reached his goal and the other didn't, the loser would donate the $ to the winner's think tank.
If neither reached his goal, $2,000 would be donated to the Center for Science in the Public Interest.
Need I say that provided an enormous incentive not to lose. However, how to explain that one of the participants didn't lose a lb., while the other reached his goal.
Free rider principle at work?
Posted by: Francesca at Feb 27, 2008 4:19:13 PM
This is a paragraph from an Op-Ed by Michael Gerson of the Washington Post:
"But there is something essentially countercultural about Christianity that should make evangelicals restless in any political coalition. Christianity indicts oppressive government -- but also the soul-destroying excesses that sometimes come in free markets and consumerism. It teaches enduring moral rules -- and an emphasis on justice for the least and the lost. It is often hard where liberalism is soft, and soft where conservatism is hard."
So, so sad....
Posted by: Chairman Mao at Feb 27, 2008 5:36:01 PM
Check out this alarm clock. I think it is very much in line with the current discussion. Now what we need for this case is a scale that works on the same principle. You put in your target weight, and every time you go over it, it sends some amount to a hated organization of choice.
Posted by: Diego Gruber at Feb 28, 2008 7:51:53 AM
The more useless the cause his $100 goes to, the bigger his incentive should be to accomplish his goal. Then the opportunity cost of losing weight is feeling good about supporting poor people in India.
So gogo pledge the money to Cowens hummer!
Posted by: Sune at Feb 29, 2008 5:04:06 AM
