StickK Launches!

StickK, a business that allows you to enter self-commitment contracts, is now open for business. If you would like to lose weight (for example), you make a contract with StickK, under which you are required to pay money to a worthy charity if a referee determines that you failed to meet your weight-loss commitment.  You can also choose an unworthy charity:

During the contract creation process, you have the option of selecting an Anti-charity as the Recipient of Stakes. The purpose of Anti-charity is to give you an added incentive to achieve your goal by designating your stakes, upon failure, to go to an organization that you strongly oppose. You should select an organization which promotes values that are the most contrary to your own. We currently have a selection of Anti-charities which fall on either side of the following highly contentious issues: Abortion, Gay Marriage, Gun Control, and the Environment.

So if you want to lose weight and are a passionate gun control advocate, you can commit yourself to give to the NRA if you put on some pounds.  The image of slaughtered innocents should concentrate the mind as you eye that candy bar. (Unfortunately, true Anti-Charities—such as Americans for Nuclear Waste, and Club the Baby Seals—are omitted, but I am confident that this error will be corrected in the future. To see why these are necessary, see here.)

Ian Ayres, one of the founders of StickK, has tested the product on himself, and has posted a graph that shows how he lost 20 pounds after staking $500.  (I assume that the designated charity was Harvard Law School.)

The website claims that friends and family should join in to encourage StickK customers to stick to their commitments. But that is not entirely true.  Unless Ayres has chosen a true Anti-Charity as his beneficiary, his colleagues, friends, and students should want to tempt Ayres with free desserts in the Yale cafeteria.  True, if Ayres loses a pound, he is certainly better off, and so are his friends, and the rest of us will benefit from some extra academic papers of which his premature death from heart disease would otherwise deprive us.  But this lost pound also means that some child will go unfed, or some whale unsaved, or some rain forest unpreserved, or some tot untoyed.  Ayres is a terrific scholar, but is this the price we must pay for an extra paper or two in his old age? If you really want to save the world, find yourself a StickK customer and offer him a cigarette or an ice cream sundae.

Comments

[Dean Karlan]

Eric --

glad to see you find the site engaging.

as a development economist I have to pipe in here with reference to your statement "But this lost pound also means that some child will go unfed, or some whale unsaved, or some rain forest unpreserved, or some tot untoyed."

We would disagree with this point for several reasons.

First of all, relative to no contract at all, what is the counterfactual use of the funds? Yes perhaps a fraction to charity, but the typical charitable contribution rate out of income is about 2%.

Second, in equilibrium and proper expectations, one does not enter into such a contract if they won't fulfill it. So if one succeeds, you have all the same cash you had before had you not entered into the contract (and maybe more, if you stopped smoking or eating too much, although now perhaps you need to save more too in order to afford that longer lifespan).

Third, spillover effects: if one fails, then yes the money can go to charity, but also has adverse effects on the ability of others to reach their goals (i.e., if the site fails because too few succeed, then the site will go away, even if it works for some people). So there is a spillover effect, and failure by one has a cost to others. I will be the first to admit i do not know how to quantify that in any reasonable way, but the point is just that from a societal perspective your "failure" has a gain (the $ you are donating) and a cost, and we do not know the net effect.

Lastly, again an equilibrium point, this time more of a general equilibrium point, if this works and lowers overall obesity and smoking rates, this will be good for taxes and growth and prosperity for the economy and society as a whole.

again, thanks for the post. it is fun to think about these things.

-- Dean

ps: If you have jerks for friends who will do what you suggest, and you can't resist them, then you shouldn't write the contract in the first place! Maybe you should hang out with your enemies more, they will help you reach your goals.

[St. Darwin Assissi's cat]

Dear Professor Posner,
This blog is too FUN. Glad to see all of you brilliant economic legal sorts are having a good time concurrently improving health and planet....ya all rock.
Fan