The concept “egonomics” was introduced by Schelling in 1978, in his address to the American Economic Association. He was musing, in particular, on the ways in which people manage themselves either to do, or to avoid doing, particular activities or behaviors – the “tricks” they play on themselves in order to make unpleasant or difficult decisions unnecessary. Some of the examples he gave were to place the alarm clock at the other side of the room so it cannot be turned off without getting out of bed; to deliberately set watches a few minutes ahead of time to avoid being constantly late; to be committed to weekly payments into a Christmas Club to make saving easier and savings less readily accessible during the rest of the year and, at the extreme, to dieters having their jaws wired up in order to avoid the temptation of food. Putting things out of reach, or the self-promise of a small reward, or surrendering authority to a trustworthy friend, were all, Schelling suggested, means of policing or managing the self.

Using cigarette smoking as an example, he went on to posit that addictive behaviors demonstrated an anomaly in consumer theory in that “consumers are getting negative satisfaction out of something they spend a lot of money to consume”. In other words, despite the known detrimental social, health and financial consequences, people continue to be hooked into the behavior. The way some of them can reverse the addiction is through, amongst other tactics, paying for support of professionals, drugs or behavior-aversive aids. The suggestion is that with both “positive” behaviors (regular saving, exercising, meeting deadlines) and “negative” behaviors such as cigarette smoking, the consumer will find ways of managing the self, whether through self-reward or self-intimidation.

At the core of Egonomics is the idea that within each person exists two selves: the future self and the present (or past) self, constantly at odds, leading to a sort of cognitive dissonance between the two.  Both selves exist within us and are equally valid, but aren’t always active at the same time.  It’s a natural and ongoing conflict between immediate desire and long-term goals.
“Many of us have little tricks we play on ourselves to make us do the things we ought to do or to keep us from the things we out to foreswear.  Sometimes we put things out of reach for the moment of temptation, sometimes we promise ourselves small rewards, and sometimes we surrender authority to a trustworthy friend who will police our calories or our cigarettes.  We place the alarm clock across the room so we cannot turn it off without getting out of bed.  People who are chronically late set their watches a few minutes ahead to deceive themselves.” – Thomas Schelling, Egonomics, or the Art of Self-Management

Diamond, Mortensen, Pissarides Share 2010 Nobel Prize for Economics 2010

The Prize in Economic Sciences in Memory of Alfred Nobel 2010, was awarded to Peter A. Diamond of the MIT, Dale T. Mortensen of Northwestern University and Christopher A. Pissarides of the London School of Economics for their analysis of markets with search frictions, according to the Nobel committee. Though the theories are useful for …

Read more

Chi sarà il Premio Nobel 2010 per l’economia? Probabilmente Richard Thaler.

Chi sarà il Premio Nobel 2010 per l’economia? Auspicabilmente il vincitore del Nobel per l’economia quest’anno sarà Richard Thaler. Questa è la sua biografia: Richard H. Thaler è un economista americano specializzato in Finanza Comportamentale e Psicologia dei processi decisionali, discipline che colmano il divario tra economia e psicologia. Thaler indaga le implicazioni legate alla …

Read more

Richard Thaler, Nobel Prize for Economics 2010, just a prediction?

Who will win the Nobel Prize in economics this year? Probably Richard Thaler will be the Nobel Prize for Economics 2010. Richard H. Thaler studies behavioral economics and finance as well as the psychology of decision-making which lies in the gap between economics and psychology. He investigates the implications of relaxing the standard economic assumption …

Read more

Overcoming Temptations

Many purchase and consumption decisions involve an intrapersonal struggle between consumers’ righteous, prudent side and their indulgent, pleasure-seeking side. Whereas purchasing and consuming utilitarian necessities and virtues (e.g., a practical car, a healthful food item) is considered responsible and farsighted, yielding to hedonic temptations (e.g., buying a luxurious car, eating a chocolate cake) is viewed as impulsive and wasteful.

Read more