Small Victories: Examining Market-driven Solutions in Savings and Debt Reduction Experiments

Alexander L. Brown (Department of Economics, Texas A&M University), Joanna Lahey (Bush School of Government and Public Service, Texas A&M University)
This project is concerned with individuals’ savings decisions, specifically aimed at “suboptimal savings behavior;” that is, people who do not save “enough.” The phrase, “small victories,” refers to the idea that motivation to defer consumption can be enhanced by first successfully doing something small. To investigate this, subjects are faced with a set of unpleasant tasks, and in some cases, the tasks get larger if they are left uncompleted (simulating interest on debt). Do people choose to complete a small unpleasant task first—winning a “small victory” — and then work on the larger unpleasant task? Does ordering tasks in this way improve overall performance? This project has the potential for valuable insights.