January is always a good month for behavioral economics: Few things illustrate self-control as vividly as New Year's resolutions. February is even better, though, because it lets us study why so many of those resolutions are broken.
Interpretation
This quote reflects on the challenges of self-control as seen through the lens of New Year's resolutions and their failure.
Sendhil Mullainathan's quote humorously highlights the significance of self-control in behavioral economics as many people set New Year's resolutions but often struggle to maintain them. January serves as a fresh start for goals, yet by February, we can observe the common human tendencies and challenges that lead to the abandonment of those resolutions, ultimately revealing insights into our decision-making behaviors.
In practice
During a seminar on goal-setting, this quote can be used to illustrate the importance of recognizing our behavioral patterns.
Economists specialize in pointing out unpleasant trade-offs - a skill that is on full display in the health care debate. We want patients to receive the best care available. We also want consumers to pay less. And we don't want to bankrupt the government or private insurers. Something must give.
Faced with a time shortage, we squeeze tasks into the nooks and crannies of our calendar, leaving less and less time to switch between them. As a result, we become less and less productive exactly when we need to be most productive.
The problem with data is that it says a lot, but it also says nothing. 'Big data' is terrific, but it's usually thin. To understand why something is happening, we have to engage in both forensics and guess work.
There's a popular image of people who don't save for the future as lacking in self-control. But the reason saving is so hard has less to do with self-control and more to do with a scarcity of attention.
Busy people all make the same mistake: they assume they are short on time, which of course, they are. But time is not their only scarce resource. They are also short on bandwidth. By bandwidth I mean basic cognitive resources - psychologists call them working memory and executive control - that we use in nearly every activity.
Each person feels that he is an 'expert' in one or two fields and just the 'public' in all the others. But you know, probably, from experience that no one is really able to appreciate any display of ability in any field if he himself has not, to a certain degree, taken part in its problems and difficulties at some time.
A world full of happiness is not beyond human power to create; the obstacles imposed by inanimate nature are not insuperable. The real obstacles lie in the heart of man, and the cure for these is a firm hope, informed and fortified by thought.
Its hard to be a diamond in a rhinestone world.
It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things.
Intuition (is) perception via the unconscious
Good ideas are not adopted automatically. They must be driven into practice with courageous impatience. Once implemented they can be easily overturned or subverted through apathy or lack of follow-up, so a continuous effort is required.
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