Using loss aversion to support a walking habit
People tend to weigh a loss more heavily than an equivalent gain. This article looks at how ESPL applies that tendency through its support-stake and commitment design.
Deciding to walk for your health is one thing. Continuing to do it is another.
One reason is that the comfort of resting now can feel more immediate than a possible health benefit months from now. In behavioral economics, this tendency to give disproportionate weight to the present is called present bias.
Loss aversion: a human bias
The behavioral economists Daniel Kahneman and Amos Tversky showed that people often weigh a loss more heavily than an equivalent gain. This tendency, known as loss aversion, is central to prospect theory.
Health apps often offer points for steps or prizes for reaching a goal. These gain-based incentives can help, but they may not be enough when a future reward is competing with the appeal of resting now.
Inverting the design
ESPL does not rely only on adding a reward. It also uses a structure informed by loss aversion.
When a walking challenge is set up, the support stake attached to it is deposited in a smart contract in advance.
If the goal is met, the stake is distributed to the challenger and recipients according to the rules set in advance.
If the goal is missed, the portion that the user or an intended recipient would have received is redirected according to a different distribution set in advance.
This design can make several possible losses more noticeable:
- You do not receive your planned share. The amount you would have received after meeting the goal goes to another recipient.
- You cannot pass the planned support on to someone you care about. If a family member or friend was named as a recipient, that person does not receive the intended share.
- You do not fulfill a shared commitment. When a challenge has been shared with other people, the desire to follow through may provide additional motivation.
The second possibility combines loss aversion with altruism. Wanting to direct support to someone you care about may provide a different kind of motivation from pursuing a reward for yourself.
The stake as a commitment device
Placing the support stake in advance is itself a form of commitment in the behavioral-economics sense.
A commitment device creates conditions in advance that make it harder to abandon a later decision. The story of Odysseus asking to be bound to the mast so that he could resist the Sirens is a familiar illustration.
In a health context, committing a stake can reinforce the intention formed when the goal was set. The aim is not to depend on willpower alone, but to create conditions that may make following through easier.
JPYC as infrastructure
The support-stake mechanism uses a yen-denominated currency that can be handled on a blockchain. In ESPL, JPYC provides that foundation.
Because JPYC is a stablecoin linked to the Japanese yen, users can understand the stake in familiar yen-denominated terms. Its on-chain form also allows the stake to be held in a smart contract and distributed under conditions set in advance.
Within ESPL, JPYC is used as the unit of sponsorship and as the asset held and distributed under the challenge rules.
An app for staying with it
ESPL combines a support stake and predefined distribution rules with the involvement of other people, giving users another way to approach a walking goal.
The same structure will not work equally well for everyone. It can, however, offer an alternative to relying on willpower alone and a way to consider which conditions are personally helpful.
Anyone trying this kind of commitment should start with an affordable amount and a realistic step target, then adjust the conditions based on whether they feel sustainable.
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