Tuesday, July 19, 2016

Milkman, Minson, and Volpp (2014) on Temptation Bundling

Katherine L. Milkman, Julia A. Minson, and Kevin G. M. Volpp, “Holding the Hunger Games Hostage at the Gym: An Evaluation of Temptation Bundling.Management Science 60(2): 283-299, 2014.

• Frequently our willpower to engage in activities we know we should engage in – like exercise – proves wanting. Frequently our willpower to resist alluring activities – like devoting a lot of time to reading a fun novel – also proves wanting. 

• Temptation bundling to the rescue! The idea is only to engage in the tempting activity while you are investing in the desirable but oft-neglected activity: you can only read (or listen to) the compelling novel while you are exercising. 

• The potential benefits of bundling go beyond nudging you to exercise as much as you want to anyway. Rather, the bundling can add to your welfare through two further channels. First, the exercise itself becomes less onerous. Second, the consumption of the tempting good need no longer be followed by guilt attached to squandering time on trifling indulgences. 

• The analysis involves a field experiment at an almost unnamed university. The subjects are 226 university-affiliates with gym memberships who own an iPod with free memory. The subjects are randomly allocated to three treatments. In the full treatment, an addictive novel (such as The Hunger Games) is loaded onto a loaned iPod (one iPod per subject), and the iPod is stored at the relevant gym – so the full treatment group must go to the gym (and, presumably, exercise,) if they want to listen to their novel on that iPod. The intermediate treatment group receives an addictive novel on their own iPod, and is encouraged to only allow themselves to listen to the novel while exercising. The control group is encouraged to exercise and receives a $25 bookshop gift-card that could be used to acquire a tempting e-novel. 

• Each participant undergoes an intake process, with e-novels selected by the non-controls, along with 30 minutes of exercise undertaken while listening to the novel, followed by rating how enjoyable the exercise proved. Everyone agrees not to discuss the experiment with others, and off they go, for the next nine weeks. 

• The treatment conditions lead to more exercise – but only for the first seven weeks (pre-Thanksgiving). In these seven weeks, gym visits average 7.8, 6.5, and 6.1 across the conditions. 

• The full treatment works better for those who report they like the initial workout experience, and for those who are most busy. 

• A concluding outtake visit allows estimates of willingness-to-pay for one month of a novel/exercise commitment device like that provided in the full treatment. About 60% of subjects indicate a positive willingness-to-pay for the commitment. 

• Perhaps the bundled temptation could be made more alluring, such as Netflix-style subscriptions that only work when you are on an exercise machine. Will the private sector create these?

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