"In a 1999 paper on the economics of procrastination, Ted O’Donoghue and Matthew Rabin pointed out that people are often unrealistically optimistic about their own future likelihood of doing things—such as exercise or saving—that involve costs at the time they are done, but whose benefits lie even further ahead. Mr O’Donoghue and Mr Rabin showed that this sort of behaviour can be explained if people are time-inconsistent. “Present-biased” preferences mean that people will always tend to put off unpleasant things until tomorrow, even if the immediate cost involved is tiny. As long as they are unsure of the precise extent of this bias, they believe (incorrectly) that they will in fact “do it tomorrow”. But since they feel this way at each point in time, tomorrow never quite comes. Such a model can therefore explain endless procrastination."
The Economist: New-year irresolution
Their analysis of the kind of people who are "unrealistically optimistic about their own future likelihood of doing things" rang eerily true to me as I read the article amidst a flurry of Twitter and StumbleUpon tabs I also had open in my browser. While I almost always overcome my procrastination so that it is not actually "endless," I would definitely describe a vast majority of my behavior as "time-inconsistent". By exploring the hard facts about my fatal flaw from an economic model, my constant procrastination seems not only lazy, but also irrational.
Hopefully you can glean as much from this analysis as I did. If you would like to read the full paper on The Economics of Procrastination, click here. Now get off Facebook and go do some homework already!
Bridgett, this model is very precise. I never looked at procrastination from the viewpont of an Economist before but it does make perfect sense. This modelshows that Economics really does describe how the world works and then create models/graphs to help us understand the future and why people make the decisions they do, eg farmers refusing to use fertilisers despite the fact that it can increase their yields. However, the most beneficial thing about this model is that it does provides some form of solution about what needs to be done for the farmers to use more fertilisers.They made suggestions to the government and the farmers about the incentives to increase the use of fertilisers therby increasing household income and the overall economy. This approach to Economics should be applied more frecuently in society. Economists should not only recognise and crticise the govt. during the current economic crisis and world recession, but they should also provide possible solutions to solve this problem.
ReplyDeleteThis is quite an interesting article. It really is amazing how much I can relate to this example, which is definitely not a good thing. Yet, I also see this being a view point of a psychologist in addtion to an economist, mainly because of the focus on human behavior.
ReplyDeleteI really like how this paper uses economics to explain a everyday occurrence. It makes one consider how economic principles can translate into many different situations. I think that by applying economic principles to things like procrastination, it makes it easier to realize their importance/relevance.
ReplyDeleteIt is very interesting how a simple thing like procrastination (which I'm sure everyone is guilty of time to time) can be seen in an economists point of view, however this is in a very small scale. I honestly don't know too much about the economic and political reasoning as to why the United States is in the economic state it is; however, might this be a reason as to why the United States is how it is today? Then again, I may be completely wrong, I'm just thinking out loud is all.
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ReplyDeleteThis article reminds me of when I worked at a restaurant back at home. Many of the middle-aged workers at the restaurant would often talk to me about going back to school and getting a degree. Over the two or three years that I worked there, none of the workers had applied to a school or pursued a degree of any sort. They would always say, " I'm going back to school next year." This is a perfect example of procrastination. If the workers went back to school they could all get degrees and higher paying jobs in the future. There is no major incentive to go back to school because they are making quick money now. The workers know that if they go back to school they will have to give up things (opportunity cost) such as free-time, work hours, and saved money. In many cases, an individual is better off giving up time, effort, and money into a college education. These tradeoffs might be a big commitment at the time, but the future benefits, such as a higher paying job, are greater.
ReplyDeleteIt is really interesting article!
ReplyDelete"Present-biased” preferences mean that people will always tend to put off unpleasant things until tomorrow, even if the immediate cost involved is tiny.
This made me thinking about my experience of last quarter.Becuase of my procrastination, I always feel so exhausted before the test. Even though I know it will be much more easier if I kept doing the preview and review everyday ,maybe only take me half an hour. But...the "dream" never come true...
Depends on the understanding of procrasination by personal experience, it really make sense which help me thinking about the economic phenomenon. Like we talked about the how people make decisions in class, people face trade-offs,spend time on facebook or spend half an hour to review? compare which would bring more benifit to us, then I decide to get off the facebook and to review what I learned today.
Thx Bridgett, I think this is my first little step on the road of the Econ = )
It's really interesting how economics can be related to everyday life and the point that Bridgett made about procrastination is true for me as well as many other students. If people do not have an interest in the things they have to get done, they will always tend to put it to the last minute if they feel indifferent about them. Although the U.S is currently in a recession credit card companies are still making money because people keep on spending and sometimes don’t realize the amount their spending, until the credit card bill comes in. If they don’t have money at the time of the purchase, it is possible that they will not have the money to pay the bill when it comes, only adding interest and ending into a huge debt because other things came up and they were more important than paying the credit card bill.
ReplyDeleteThe Economy of Procrastination.Very interesting! I am most definitely guilty of this. I think this ideology goes back to Makinaw's principles of economics 1 and 2; trade offs and opportunity cost. In facing unpleasant tasks, one often would rather enjoy their leisure time than do what actually needs to be done which ultimately benefits them in the long run. For many the marginal benefit (facebooking, texting, etc) seems greater than the marginal cost (work, pain, stress, etc.) at the time. People feel that what you have to give up isn't worth what your getting. For example, studying for a test two weeks in advance is not worth the time when you can cram study later and receive about the same grade. Or at least that is our rationale behind our decision to procrastinate.
ReplyDeleteI like this example about how some of the Principles of Economics are used in everyday life. It's pretty interesting to see how economics can be aplied to things that you probably would never think about in that context. The idea that we trade off something important that takes a long time to aquire so that we can benefit right away from a couple of things (that are most likely useless) is a little distressing, although it definately seems to be true in some circumstances.
ReplyDeleteI often find myself wondering what procrastination would look like if we did not have computers in college. What would we choose to rather do than our essays or problem sets? Would we get out of our dorms more and be with our peers more? I think that it is hard for people in our society to be rationally minded when it comes to these sort of choices, because we are taught to be optimistic from a young age. Of course we can all succeed! Of course we can finish that paper if we put it off until midnight before the due date! Our taught optimism ensures that we can dream away the unpleasant things we should do today and choose present-biased thinking. We rarely think of the trade-off for future advantage that comes with sometimes facing issues head on.
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Procrastination is a problem that i have too, as do many other students. The cost of one procrastinating & choosing to do one thing that you find more pleasant, like playing a game with friends, instead of writing an important paper and telling yourself "you"ll do it later" could be your final grade. You give up time you can use to do your homework but in the end it could cost you your final grade. And i think many students understand that but we seem to do it anyways.
ReplyDeleteI believe The Economist did a great job in showing how economics relates to our everyday lives with this piece. This article explains what an incentive is too me in a very clear way, because it relates too me as a student who procrastinates more than he should. The article shows how the incentive is if you do your work in a timely fashion, doing that will ultimately reflect your grade. If you procrastinate and wait until the last minute to do a paper, for example, that risk will ultimately be the reward, which is most likely a grade that you will not be happy with. I think applying economics to something like procrastination can really show us that even if we think we know nothing about economics, we actually do because it is incorporated into our daily lives, just like procrastination is with me.
ReplyDeleteThe model in this article sets a negative example for us. It seems I always come through this kind of situation in my own life...I just can't help procrastinating my work day by day until they are due in 24 hours, for sometimes I'm relying too much on "tomorrow". Well, it's amazing that some principles in economics can be applied to our daily life. It's interesting to study economics from another perspective.
ReplyDeleteI see that I am not alone regarding this matter. I find that I have become extremely optimistic when it comes to my work and how successful I will be. I take that attitude and use it as a way to subdue my thoughts as I am playing video games or checking my facebook when I should be reading or studying. Reading this article has really opened my eyes to the realization that my optimism is crippling my ability for success.
ReplyDeleteVery interesting to read this article. I often find myself in similiar position as you and not having an endless cycle of procrastination, but there definately is some work that waits till the very last moment.
ReplyDeleteThis was an interesting spin on a familiar problem that is such a huge nuisance in my life. I have to admit, I'm even writing my comments later than I should have. If I spent as much time being productive as I do procrastinating, I probably could have learned a new language.
ReplyDeleteNow that I think about it, I suppose I "procrastinate" with my money as well. My dad has been nagging me to start a retirement fund since I was 16 or 17 (sounded ridiculous at the time, but I know it's smart advice). I keep making up excuses not to start saving right away. Hopefully now I can put things in perspective and start acting more rationally with my work and my money.
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