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.
Believing that other people are always better than you-better-looking, more capable, richer, more intelligent-and that it's very dangerous to step outside your own limits, so it's best to do nothing.
To young people born under the weird planet of the SAT, intelligence was equated with agility, with raw acuity. It produced a certain sort of person of which I was a typical specimen: the mental contortionist, able to rise to almost every challenge placed before him, except the challenge of real self-knowledge.
Throughout life, we get clues that remind us of the direction we are supposed to be headed if you stay focused, then you learn your lessons.
If you live long enough, you'll make mistakes. But if you learn from them, you'll be a better person. It's how you handle adversity, not how it affects you. The main thing is never quit, never quit, never quit.
The future belongs to those who learn more skills and combine them in creative ways.
Never stop being a kid, Richard. Never stop feeling and seeing and being excited with great things like air and engines and sounds of sunlight within you. Wear your little mask if you must to protect you from the world but if you let that kid disappear you are grown up and you are dead.
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