Carrots and Sticks Book Summary, by Paul L. Marciano
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1-Page Summary of Carrots and Sticks
Overview
The Power of Habit explains the importance of habits in our lives and how they are formed. The book includes tips on changing habits both individually and as a team or organization. It spent over 60 weeks on the New York Times bestseller list, which shows that it’s well respected by many people.
It’s annoying when you see people littering. No one likes a litterer, which is why many cities impose fines on them. But it doesn’t really deter bad behavior because even with the threat of a fine, plenty of people still throw trash around. So how can we inspire society to do the right thing? These key points explain what types of incentives actually motivate people and change their behavior for the better.
The author explains how to use incentives to change people’s behavior. The key points of the article are: 1 why fining parents for picking up kids late at school inspired more tardy pick-ups, 2 why even though drugs are harmful, many addicts can’t kick the habit, and 3 why governments should give collected parking fines to Scientologists.
Big Idea #1: We are more likely to choose a smaller reward that we can get right now over a bigger, long-term reward. We don’t know what will happen in the future!
How many people do you know who try to lose weight even though they eat too much candy? Or perhaps a friend wants to quit smoking cigarettes but can’t seem to give it up. Why are these bad habits so hard to break? It’s because humans tend to forgo long-term benefits for immediate rewards. For example, if you asked a group of friends about their goals, most would probably talk about staying healthy or saving money for retirement.
Most of us forget our goals when we’re distracted by something that’s more appealing in the moment, like a candy bar or a new gadget. Drug addicts are particularly prone to this behavior because they do serious harm to themselves for the sake of getting high.
Most people know that they should be saving money for the future, but they can’t resist spending it on things like vacations and new cars. We all have vices to which we give in at one point or another. People are also impatient; they want immediate gratification instead of waiting for something better in the future.
Economist Richard Thaler asked participants in a study to choose between either receiving one apple today, or two apples tomorrow. Participants gladly waited an extra day to get both apples.
The logic we use for decisions that affect the long-term future differs from the logic we use when faced with short-term decisions. People offered a single apple today or two tomorrow invariably chose one apple – immediate satisfaction.
Thaler’s findings show that when we have something good in front of us, the bigger rewards that take time to achieve are less attractive. Why is this? It’s because as soon as we start waiting for something, there is doubt about whether or not it will happen at all.
Big Idea #2: We hate losing more than we like winning. For many, saving for retirement is a loss because they don’t see the benefit of it.
Most people hate losing. If you’re in the same boat, you’re not alone. In general, people dislike losing something they already have more than they enjoy gaining something new.
It has also been observed in animals. In a study, apes were given two pieces of apple. One piece was taken away with 50% certainty and the other one had an equal chance of being taken away or getting another piece added to it.
Carrots and Sticks Book Summary, by Paul L. Marciano
