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Sunday, July 22, 2018

Many New Year’s resolutions are about redemption. Maybe you aren’t the sort of person you want to be. Maybe you aren’t kind enough to others (strangers, co- workers, family members). Maybe you suffer from a self-control problem involving cigarettes, alcohol or gambling. Maybe you procrastinate; maybe you’re impatient or impulsive. Maybe you haven’t taken steps that would enable you to make your life better — with more time off from work, a vacation in a gorgeous setting, an adventure or two.

On New Year’s Eve, you resolve to make a change. But within a month, you’re back to your normal patterns. How come?

Some clues can be found in a study with the revealing title, “Everyone Believes in Redemption.” The paper, by the economists Robert Letzler of the Federal Trade Commission and Joshua Tasoff of Claremont Graduate University, doesn’t involve New Year’s resolutions. But it demonstrates that people suffer from both unrealistic optimism and inertia, which make it hard for them to carry out their plans.

Letzler and Tasoff gave the participants in their study an opportunity to earn $20 by redeeming a mail-in form. The subjects were instructed to print out a “certification page,” which they were required to include with their form.

Participants were also asked to predict the likelihood that they would send in the form. As it happens, their responses were wildly optimistic. Actual redemption rates ended up being about 50 percent lower than what the participants predicted. In other words, they resolved to mail in the form, and they fully expected to do so — but ultimately they didn’t. (Similar patterns are observed in the real world; each year, American consumers fail to mail in at least $1 billion in potential rebates.)

Can anything be done to help? Letzler and Tasoff tried three different interventions.

First, they informed people about the low redemption rates of earlier participants. But this information, helpful though it would seem, had no effect on people’s optimism about what they would themselves do or on the likelihood that they would mail in the form.

Second, Letzler and Tasoff sent people emails to remind them of the approaching deadline for redemption. The researchers had reason to think that this intervention would be effective, because reminders have been found to work in (for example) getting people to pay their bills and to come to doctor appointments. But in the case of the rebates, reminders had no effect. People ignored them.