Loss Aversion Matters
To me, at least. Loss aversion is "the tendency for people strongly to prefer avoiding losses than acquiring gains". (
Source).
My wife pointed out to me that when you take into account all the extra time I spent working out in March and that 'only' $300 was at stake, I was making less than minimum-wage if I treated my workouts as a job. She was right. Given that I would not be particularly motivated by a minimum job (particularly one that was so physically taxing!), why did this scheme work?
Of course, I was working out that hard partly because I
wanted to work out that hard, because I wanted to lose the weight. So my motivates were obviously entirely financial. But at the same time I wanted to work out that hard
before I made this gamble and I did not manage to, so that cannot be the reason. I don't believe the prospect of making $300 would have motivated as much. While not entirely rational, my motivation shows all the classic signs of loss aversion.
Avoiding Losing Money and Face - Both Are Necessary
I believe this approach has worked so far because of the dual fears of losing $300 and having to publicly announced that I failed in my goal.
The Importance of Public Humiliation
Had no one known about my goal, and I failed at it, I could have just quietly paid the $300 and chalked it up to an expensive learning experience. One thought kept running through my head was "What is my Mom going to think when she visits the site and sees that I lost $300 on a silly gamble?" I would also never hear the end of it from my co-workers. I suppose I could always claim I dropped the weight when I had not, but I would like to think I am an honest guy, but more importantly I am sure my friends and co-workers would notice if I still looked the same. The desire not to look foolish in front of friends, family and co-workers you respect can have powerful consequences.
But the Money is Still Necessary
The money was still a necessary ingredient in making this plan work. Many of us have made well-intentioned goals, announced them to friends, but did not end up following through - "I'll stop smoking this year"... "I plan to lose 10 pounds by Christmas"... "I will finally finish my thesis this year", etc. etc. Our friends realize that when we make statements such as these, we are as much expressing desires as we are making firm commitments about the future. So failing on these goals' leads to no loss of face, because they were never really interpreted as goals in the first place. By placing money (and a significant amount) on the goal, we signal to others that we see this as a true goal - not an expression of a desire. We are putting our money where our mouth is, as the expression goes.
Where the Money Would Have Gone When I Lost Didn't Matter Much
In fact, I do not believe it crossed my mind once. Which was probably a good thing, considering that $100 of my failure money would have gone to
Médecins Sans Frontières as chosen by
Felix Salmon. I don't know how motivated I would be to workout if I thought about the idea that my success meant that starving war orphans would be denied medical care. Now that I think about it, I am feeling a little guilty that they will be denied money. I think I will make a donation.
