New Year, Old Me
Vanshikaa Khandelwal
SY B.Sc.
Reading time : 4 to 5 minutes
Every December, the people of the world are full of hope and ambition, as they think of and decide their new year resolutions, and by the end of January, they remember exactly why they weren’t following these resolutions the previous year. Speaking from experience, resolutions are harder to keep than promises. No matter how much we’d like, it’s extremely difficult to stay consistent. There are even whole businesses profiting from failed resolutions – A Planet Fitness in New York has reported having 6000 paying members, when it only has a capacity of 300 people. This struggle to follow through, as we will explore in this article, ties in very closely with behavioural economics.
Behavioural economics is a branch of economics which applies psychological principles to human behaviour to explain economic decisions made. It deals with behaviour that deviates from the usual assumption that everyone is a rational consumer and explains why people do the things they do. So why do most people renege on their resolutions faster than a college student promising to study over Diwali break?
The best theory to explain this phenomenon would be Present Bias or Hyperbolic Discounting – the tendency of people to settle for a smaller reward in the present, than a bigger reward sometime in the future. We are well aware of the benefits of being more active or saving our money, but the second we get a call from a friend inviting us out, much like Dory, we suddenly forget our resolutions completely. The small reward of having fun with a friend is weighted much higher in our minds than the long term huge reward of our dream strength, body or bank balance. The most common manifestation of this concept is procrastination itself. Just one more episode, just one more hour of a nap, just one more reel – we know none of these will stop at “just one” – more broken promises because we value a reward right now much more than the delayed benefits of being productive.
Another theory we can use to explain our inability to keep up with the resolutions is Loss Aversion, that is, the negative impact of a loss being felt more severely than the positive impact of a gain. If my resolution is to save more money, not buying a cute outfit or nice meal now makes me feel actual grief to the point which outweighs the potential future gain from my savings. This loss aversion leads to resistance to any kind of change as the loss of our current way of doing things overshadows gains from change in the future.
Another concept applicable here is the “What-the-hell” effect (not making this up). Imagine you’ve been extremely consistent with your resolution of workouts and diets, but suddenly there’s a box of chocolates in front of you. Who can resist chocolate? God knows we deserve them after dieting since the new year. But one turns into two, and now it’s become concerning. In this case, the usual thought is, “I already had two and broke my diet, might as well have more” – this is the phenomenon that explains why our willpower drains so quickly after we fail even once at something. This is by far the most severe threat to our resolutions, since even a minor slip can lead to us completely discarding them.
Surprisingly, even though we have all kinds of information available at our fingertips, we don’t usually use this to form opinions, we have certain set beliefs, rules of thumb called “Heuristics” that we follow instead. These represent information asymmetry and are extremely dangerous to our resolutions. Sometimes, we may not even begin a task because it’s fixed in our minds that the task is impossible. Anchoring bias is when we base all our opinions on only one, usually the first, piece of information available to us. If we hear an activity like running is difficult, no matter what, we will be afraid to ever start, because in our minds, it’s “difficult”.
Let’s talk about how the world affects our resolutions, starting with the same heuristics we have encountered. The most prevalent one being the availability heuristic, a rule whereby we judge something by an opinion that someone close to us had, simply because it’s available to us instantly. If my best friend told me a particular book was interesting, I believe it’s a good one. Another one is social proof – changing our course of action because those around us are not following the same one – if no one else around me is trying to wake up early as a resolution, I should not either.
Lastly, a nudge is a small push towards one particular choice which does not hamper any other choices at the same time. The easiest example is the chocolates, mints and candies near the billing counters in a grocery store. These are things that one may normally not even look for, but if they are right in front of you as you wait in the endless line for billing, they’re not easy to resist and you end up buying them. Another example is the snooze button on alarms. The continuously ringing alarm can be quickly delayed and silenced by pressing this button – you even avoid the risk of not waking up at all. You simply push waking up; by 10 minutes, and again 10 minutes and again and again – it’s a vicious cycle of nidges, so if your resolution is to start waking up early in the morning, do not rely on your phone, ask someone to wake you.
Finding all this out, one might think it’s just impossible to keep up the resolutions since apparently, not only the world, but I, myself want my downfall. On the contrary, all this knowledge can help us to create a resolution that none of the above ideas can deter. It’s all about moving the mountain by carrying smaller stones – we need to break our resolutions down into small, easily doable, well-defined tasks, and work on accomplishing each of them. Now that we know all about the behavioural economic theories that make us behave the way we do, we can make efforts to notice when one of them is in force and alter our mindsets as well. Obviously, incentives matter – we must reward ourselves for progress made, no matter how small.
This year was long and tough for a lot of us, so here’s hoping that we can keep all the resolutions we make for 2025. Happy new year!