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December 04, 2007

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DWAnderson

Is it possible that the contracts are enforced on the basis that they are conditional pledges to the charity? Those should be enforceable if the transaction is structured correctly.

minderbender

Isn't the solution to set it up so that the money goes to a charity the person despises? If I'm a Michigan alum, and my $1,000 is going to an Ohio State scholarship fund, I'm going to be quite motivated to lose the weight or whatever. The net effect is more money for charity, but in each individual case the charity is repugnant.

minderbender

To piggyback on my own comment: if the names were published, the "rival school" method would also mobilize social norms to pressure people to keep their commitments. It doesn't have to be based on school loyalty, it could also be ideological, but there the charities might cancel each other out to some extent ($1,000 to ACS and $1,000 to the Federalist Society - but some charities with little overlapping support would not cancel each other out - an abortion-alternative fund and a nature conservation fund, for instance, or perhaps an abortion-alternative fund and a condom distribution fund). Also, some rivalries might not be strong enough, and others we might not want to stir up.

You could also put the money in escrow, and if you live up to your commitment, it goes to the charity you choose. If you fail, it goes to a charity you despise. I guess that's not much different from the way it is set up, but I can imagine advantages to that system (for instance, it might increase the pressure from social norms - if you don't lose the weight, Michigan is effectively worse off by $1,000 while Ohio State is better off by $1,000).

ericposner

Yes to minderbender on allowing people to choose their own anti-charity, but to the contrary it is important that the payments offset (for example, $1000 to pro-life and $1000 to pro-choice) and hence generate waste, rather than produce a residuum of social good. Offsetting payments to ACS and the Federalist Society may generate useful dialogue and debate, and that would be bad for the business model, since if the customer thinks that by eating cheesecake he contributes to useful political debate, his incentive to fall off his diet is increased.

minderbender

I understand why social waste is necessary in a gift-giving context, where cash gifts offset each other and destroy the signaling/commitment value of the exchange. In this context, though, I don't see why waste is necessary. Nothing says that for every ACS participant, there will be a Federalist Society participant. The net effect may be to improve discourse, but the marginal effect is lopsided in a way that certain individuals will find distasteful. I may be overstating the degree of distaste involved, but it seems to me that very few people believe that more funding for their ideological opponents will improve the discourse in any way. Perhaps the ACS/Federalist Society example was poorly chosen in this regard, because the two organizations are not so far apart in the way they spend their money.

Here's an example that might illustrate my point better. Back in 2004, very few liberals (except perhaps a few liberal hawks) would have believed that there was any conceivable benefit to donating to George Bush's campaign. Likewise, few conservatives would have belived that there was any benefit to donating to Kerry. Nevertheless, had this StickK business been in place, we could have achieved the equivalent of public (albeit arbitrarily distributed) funding of the election without deadweight loss from taxation. True, both liberals and conservatives might applaud this result, but the marginal $1,000 to Bush is still $1,000 to Bush.

Maybe I'm hopelessly confused at this point, but it strikes me that if people are thinking on the margin, then large aggregate offsets might not matter one way or the other.

TJ

Isn't there a bit of a balance here? Sure, the program would be more effective--after I subscribe--if the money goes to Sudan, but that does not mean the program is ineffective now. And the fact that the money goes to charity instead of Sudan makes me more more likely to subscribe.

Stated another way, the program works as long as I would prefer to not eat excessively and keep my money, rather than eat excessively and see my money go to a good charity. That would describe most people who do not otherwise donate large sums to charity. I have a mild incentive to not eat, a mild penalty for failure, but also a mild barrier to signing up.

If we increase the penalty to failure, we increase the effectiveness of the program in one sense -- after someone signs up. But we also deter people from signing up if the penalty for failure is too severe (since there is a point of diminishing returns to effectiveness). To take the most extreme example, if the penalty for failure is committing ritual suicide (assuming that is enforceable), the program would become very effective. But nobody would sign up because there is the 0.01% chance of failure that has disasterous consequences. The overall goal of the business--having the largest number of people lose weight--would be frustrated.

Alice

Not being a legal or behavioral expert, I won't try to debate the points about enforceability of "contracts," or the fine-tuning the motivational aspects of this weight loss program. Not that that has ever stopped anyone from voicing opinions about anything, but I'll exercise some restraint.

I can't help but wonder as I read this just what the hell was this law professor thinking in establishing this absurd product/service? Is this a joke? Is this what law professors are reduced to? I think the guy has too much time on his hands.

What his "motivator" is seems irrelevant if the you look at the history of obesity in this country and the strong attachments we have to fat-producing behaviors. These behaviors are so entrenched that something like 95% of people who lose a significant amount of weight not only gain it back, but put on more pounds.

There are any number of weight loss programs and pitchmen and women for them to rev up most fatties to lose SOME weight at SOME point. Whether its Atkins, or the Water Diet, or Weight Watchers or Joe Lunatic who dreamed up a scam and convinced some people to part with their cash, just about anything can serve as a motivator at any point in time. Even a "negative charity" motivator.

There are a lot of questions about this that don't seem to be addressed. Like how "success" is defined for example. If a person loses 10 lbs, as agreed, is the program a success? What if they gain it back again? What if they really needed to lose 100 lbs but only lost the 10? Were they successful? What if they agreed to lose 100 lbs but only lost 75 - they and their doctor would probably consider that successful, but the lawyer wouldn't if I understand the setup correctly.

This isn't real-world, it's just a mind-wank for people who think they understand human behavior and motivation. And who aren't adverse to getting some publicity and/or money for a so-called "outside the box" theory for dealing with serious problems. It's also not new. How many times have friends, family members, loved ones begged/bribed/threatened their imperfect subject into giving up a destructive behavior? Tens of thousands of times I'll bet. Mostly to no avail. I can't see how the more powerful influences of people close to you, or threats of bad stuff like arrest and imprisonment, can fail to motivate while something as distant and irrelevant of money going to a charity you don't like would succeed. How absurd.

I think the law prof ought to stick to his lesson plans and not quit his day job just yet.

Mike

More amusingly, as Aaron Schiff has pointed out, this could lead to another business plan: buying insurance to protect yourself in the event you fail to live up to StickK's program.

Edward Swaine

Eric,

Brilliant. If, for whatever reason, there were resistance to the anti-charity idea (maybe a given genocidal government isn't tax exempt), an alternative would be donate money to an attractive charity but credit it to someone who is entirely unattractive -- so that falling short of a weight-loss goal meant that Mugabe gets credit for giving $1000 to Toys for Tots. If this were too diffuse, each person could supply StickK with the name of a bitter enemy from childhood.

AF

Apparently, Professor Posner's proposed alteration to Professor Ayres' idea has been suggested before. http://www.biblio.com/details.php?dcx=44795324&aid=frg

I am not as cynical about Ayres' idea as other commenters. But I don't see why they need to give the money away. Why not keep it, using it to pay for a good monitoring system and other services, or distribute it as rewards to participants who meet their goals.

Skippy

Comment to DWAnderson: To address the legal question (which is probably even more a "mindwank" than the economic one), state laws may vary, in general the fact that the charity is not a party to the "contract" probably makes it impossible for the charity to enforce it against the weight-loser, and so causes it to fail as a charitable pledge (this could be corrected, of course by having the charity a party to the agreement up front). In addition, the fact that the "contract" is conditional on actions controlled by the weight-loser may have some impact on whether it is enforceable as a pledge.

But it is an empirical question whether the fact (if it is a fact) that the contract is not legally binding has any impact on the "success" of the project. It seems to me that it is likely too expensive (in a variety of ways) to sue Ian Ayres for $1,000 to prevent the money from going to charity (which may be a good reason for the charity to be not too unpleasant and for the company not to keep the money).

A better solution, of course, would be for Ian Ayes to pledge to gain a pound for every pound anyone in the program lost, and to give his own money to charity if he couldn't. Then we'd get to test whether the incentive of seeing pirated footage on YouTube of Ian Ayres moaning as he stuffed one last cream puff into his mouth is as powerful a motivator as I suspect it is. Homo economicus is not driven by currency alone, after all.

EDUARDO COCCA

We will all end up this way
Dear Friends

As a University Professor at the Kennedy University I taught five subject, among them Pharmaceutical Use and Administration. I had more than 50 excellent students, inquisitive and eager to learn more. My mission, as well as teaching pharmaceutical legislation, was to explain to them how this activity functions commercially, and in the course of one of our projects, we were dealing with a type of decongestive nasal drops, a naphazoline-based drug, which has been on the market for more than 40 years. On consultation with the biggest supplier of drugs for the pharmaceutical industry it was revealed that the cost per vial was 0,03 pesos, and the sale price 11,25 pesos - a profit of 37500%. Of course this has no comparison with any legal activity.

I was invited on 5th June 2007 to the Annexe of the House of Representatives of the Nation where workshops were being held on "Ethics and Medications". Those present were legislators, union officials, and the members of the Pharmaceutical Chambers, supposedly not invited, but there they were in the second row, pharmacists etc. At the end of the workshop anyone who wished could make a presentation. I chose to do so, and I addressed myself in particular to the members of the industry very near to me. The problem is the difficulty of access to pharmaceuticals, our compatriots are dying, especially children, many of them very young, and these people shamelessly make a profit of 37500%. This is a huge scandal which the State should, and must, resolve – it cannot be ignored.

The response to my words came all too soon – not in an attempt to find a solution to the matter but, on the contrary, to get me out of the way. I was summoned by my Dean Dr. Capón Filas, and the Director of Pharmaceuticals Magariños, and with a hurtful speech reminiscent of Kafka they took the chair of Pharmacy away from me. All my other titles were removed a few days later, but I don't regret it, I cannot be part of such enormous complicity.

Incidentally, my last salary, including bonus, was 231 Pesos.

Yours truly,

Eduardo Marcelo Cocca

University Professor

e-mail : profcocca@gmail.com

THESE ARE THE EMAILS OF ALL THOSE PERSONS RESPONSIBLE FOR REMOVING ME FROM MY POSITIONS, IN CASE ANYONE WISHES TO SAY ANYTHING TO THEM

A BROTHERLY HUG FOR EVERYONE

EDUARDO COCCA

Dr. Rodolfo Capón Filas
caponfilas@fibertel.com.ar

Pharmaceuticals : Maria del Carmen Magariños
magarino@biol.unlp.edu.ar
mcmagarinos@fibertel.com.ar

Rector
rectorado@kennedy.edu.ar


--------------------------------------------------------------------------------

Darrel needs to restore health and balance

I would like to add something:

stickK is a web-based company that helps you achieve your personal goals through "Commitment Contracts." You create a contract obliging you to achieve a specific goal within a specific time-frame.

By doing so, you put your reputation at stake. You may also choose to wager money to give yourself added incentive to succeed. If you do succeed, you get your money back. If you fail, the money is forfeited to charity, or to one of several causes, or to a person of your choosing. stickK's services are absolutely free.

Joan A. Conway

Some poor souls are tied to the "Carrot and Stick" approach to life and this will probably work for them.

Others will see it for what it is - a slavish way to produce results to the almighty dollar.

This wouldn't work for me and I would overthrow the apple cart if it was applied to me without my approval.

But then I am not motivated like a lot of other people are.

Just going without food for 48 hours puts you in control of your appetite.

Start it a midnight and by morning be under a heavy schedule removing you from temptation until bedtime, like surgery and post-surgery. Then under medication, sucking ice chips makes you vomit eliminating any appetite for another 24 hours. Whalla! you have gone 48 hours without food and you still don't have an appetite thanks to the medication your are on. This proceeds for another 2 or 4 weeks and you probably will have lost 8 to 10 pounds. Nothing like actually losing weight to make you want to lose more of it!

Lose Inches

Well, it's a wacky way to lose weight and I guess deperate people may well go for it.

I would like to know what percentage of the $1000 dollars is siphoned off for "administration" purposes.

Personally I'm a bit of a traditionalist. If people who want to lose weight fail consistently in their efforts, then they can't want it bad enough, because the solution is simple: eat less energy than you expend.

Zantrex Energy Shot

interesting stystem... hopefuilly it turns works out and is beneficial to people. i would be too scared to put a 'G' on the line, though :/
-Jessica

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