The Irrational Bundle. Dan Ariely

regularly alone, we can make an appointment to exercise in the company of our friends. These are the tools that we can commit to in advance, and they may help us be the kind of people we want to be.

      WHAT OTHER PROCRASTINATION problems might precommitment mechanisms solve? Consider health care and consumer debt.

      Health Care

      Everyone knows that preventive medicine is generally more cost-effective—for both individuals and society—than our current remedial approach. Prevention means getting health exams on a regular basis, before problems develop. But having a colonoscopy or mammogram is an ordeal. Even a cholesterol check, which requires blood to be drawn, is unpleasant. So while our long-term health and longevity depend on undergoing such tests, in the short term we procrastinate and procrastinate and procrastinate.

      But can you imagine if we all got the required health exams on time? Think how many serious health problems could be caught if they were diagnosed early. Think how much cost could be cut from health-care spending, and how much misery would be saved in the process.

      So how do we fix this problem? Well, we could have a dictatorial solution, in which the state (in the Orwellian sense) would dictate our regular checkups. That approach worked well with my students, who were given a deadline and performed well. In society, no doubt, we would all be healthier if the health police arrived in a van and took procrastinators to the ministry of cholesterol control for blood tests.

      This may seem extreme, but think of the other dictates that society imposes on us for our own good. We may receive tickets for jaywalking, and for having our seat belts unsecured. No one thought 20 years ago that smoking would be banned in most public buildings across America, as well as in restaurants and bars, but today it is—with a hefty fine incurred for lighting up. And now we have the movement against trans fats. Should people be deprived of heart-clogging french fries?

      Sometimes we strongly support regulations that restrain our self-destructive behaviors, and at other times we have equally strong feelings about our personal freedom. Either way, it’s always a trade-off.

      But if mandatory health checkups won’t be accepted by the public, what about a middle ground, like the self-imposed deadlines I gave to Gaurav and his classmates (the deadlines that offered personal choice, but also had penalties attached for the procrastinators)? This might be the perfect compromise between authoritarianism, on the one hand, and what we have too often in preventive health today—complete freedom to fail.

      Suppose your doctor tells you that you need to get your cholesterol checked. That means fasting the night before the blood test, driving to the lab the next morning without breakfast, sitting in a crowded reception room for what seems like hours, and finally, having the nurse come and get you so that she can stick a needle into your arm. Facing those prospects, you immediately begin to procrastinate. But suppose the doctor charged you an up-front $100 deposit for the test, refundable only if you showed up promptly at the appointed time. Would you be more likely to show up for the test?

      What if the doctor asked you if you would like to pay this $100 deposit for the test? Would you accept this self-imposed challenge? And if you did, would it make you more likely to show up for the procedure? Suppose the procedure was more complicated: a colonoscopy, for instance. Would you be willing to commit to a $200 deposit, refundable only if you arrived at the appointment on time? If so, you will have replicated the condition that I offered Gaurav’s class, a condition that certainly motivated the students to be responsible for their own decisions.

      HOW ELSE COULD we defeat procrastination in health care? Suppose we could repackage most of our medical and dental procedures so that they were predictable and easily done. Let me tell you a story that illustrates this idea.

      Several years ago, Ford Motor Company struggled to find the best way to get car owners back into the dealerships for routine automobile maintenance. The problem was that the standard Ford automobile had something like 18,000 parts that might need servicing, and unfortunately they didn’t all need servicing at the same time (one Ford engineer determined that a particular axle bolt needed inspection every 3,602 miles). And this was just part of the problem: since Ford had more than 20 vehicle types, plus various model years, the servicing of them all was nearly impossible to ponder. All that consumers, as well as service advisers, could do was page through volumes of thick manuals in order to determine what services were needed.

      But Ford began to notice something over at the Honda dealerships. Even though the 18,000 or so parts in Honda cars had the same ideal maintenance schedules as the Ford cars, Honda had lumped them all into three “engineering intervals” (for instance, every six months or 5,000 miles, every year or 10,000 miles, and every two years or 25,000 miles). This list was displayed on the wall of the reception room in the service department. All the hundreds of service activities were boiled down to simple, mileage-based service events that were common across all vehicles and model years. The board had every maintenance service activity bundled, sequenced, and priced. Anyone could see when service was due and how much it would cost.

      But the bundle board was more than convenient information: It was a true procrastination-buster, as it instructed customers to get their service done at specific times and mileages. It guided them along. And it was so simple that any customer could understand it. Customers were no longer confused. They no longer procrastinated. Servicing their Hondas on time was easy.

      Some people at Ford thought this was a great idea, but at first the Ford engineers fought it. They had to be convinced that, yes, drivers could go 9,000 miles without an oil change—but that 5,000 miles would align the oil change with everything else that needed to be done. They had to be convinced that a Mustang and a F-250 Super Duty truck, despite their technological differences, could be put on the same maintenance schedule. They had to be convinced that rebundling their 18,000 maintenance options into three easily scheduled service events—making maintenance as easy as ordering a Value Meal at McDonald’s—was not bad engineering, but good customer service (not to mention good business). The winning argument, in fact, was that it is better to have consumers service their vehicles at somewhat compromised intervals than not to service them at all!

      In the end, it happened: Ford joined Honda in bundling its services. Procrastination stopped. Ford’s service bay, which had been 40 percent vacant, filled up. The dealers made money, and in just three years Ford matched Honda’s success in the service bay.

      So couldn’t we make comprehensive physicals and tests as simple—and, with the addition of self-imposed financial penalties (or better, a “parental” voice), bring the quality of our health way up and at the same time make the overall costs significantly less? The lesson to learn from Ford’s experience is that bundling our medical tests (and procedures) so that people remember to do them is far smarter than adhering to an erratic series of health commands that people are unwilling to follow. And so the big question: can we shape America’s medical morass and make it as easy as ordering a Happy Meal? Thoreau wrote, “Simplify! Simplify!” And, indeed, simplification is one mark of real genius.

      Savings

      We could order people to stop spending, as an Orwellian edict. This would be similar to the case of my third group of students, for whom the deadline was dictated by me. But are there cleverer ways to get people to monitor their own spending? A few years ago, for instance, I heard about the “ice glass” method for reducing credit card spending. It’s a home remedy for impulsive spending. You put your credit card into a glass of water and put the glass in the freezer. Then, when you impulsively decide to make a purchase, you must first wait for the ice to thaw before extracting the card. By then, your compulsion to purchase has subsided. (You can’t just put the card in the microwave, of course, because then you’d destroy the magnetic strip.)

      But here’s another approach that is arguably better, and certainly more up-to-date. John Leland wrote a very interesting article in the New York Times in which he described a growing trend of self-shame: “When a woman who calls herself Tricia discovered last week that she owed $22,302 on her credit cards, she could not wait to spread the news. Tricia, 29, does not talk to her family or friends about her finances, and says she is ashamed of her personal debt. Yet from the laundry room of her home in northern Michigan, Tricia