Nir Eyal's Precommitment Strategy: Price Pacts

This article is an excerpt from the Shortform book guide to "Indistractable" by Nir Eyal. Shortform has the world's best summaries and analyses of books you should be reading.

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Why does Nir Eyal say it’s important to make precommitments to yourself? How can making a price pact help you stay accountable to your goals?

Indistractable author Nir Eyal says that precommitments help lock you into traction and keep distractions out. One precommitment strategy he mentions is to make a price pact with yourself. Price pacts make distractions tangible and give you a monetary incentive to stay on track.

Here is Nir Eyal’s price pact precommitment strategy in detail.

What Are Precommitments?

The last part of the indistractable model focuses on locking yourself into traction, rather than keeping distractions out. You accomplish this by using precommitments—choices you make while in an undistracted state that will help guide your behaviors when you’re tempted by distraction in the future.

For example, you might precommit to saving money by setting up a portion of your paycheck to automatically deposit in your savings account, instead of believing you’ll make the right choice on payday.

Precommitments are the last piece of the indistractable model because their success depends on the first three elements:

You must understand and manage your internal triggers. Otherwise, your internal discomfort will be strong enough to drive you away from your precommitments.
You can’t fulfill a precommitment unless you set aside time in your schedule to do so.
External triggers can easily pull you off task.

There are three types of precommitments that can minimize the power of distraction: effort pacts, price pacts, and identity pacts. This article will focus on price pacts.

Precommitment Strategy Type 2: Price Pacts

You already know that distraction costs you time—a price pact makes distraction’s cost more tangible with money. In this precommitment strategy, you attach money to your precommitment as an incentive to stick with what you said you would do. If you do what you’re supposed to, you get to keep the money. If you don’t, you have to give up the money. The reason price pacts work so well is that people are more motivated by loss aversion than they are by potential gains.

The New England Journal of Medicine published a study with three groups of smokers attempting to quit.

Members of Group A, the control group, received educational resources and free nicotine patches to help them quit.
Members of Group B were promised $800 if they stopped smoking within six months.
Members of Group C made a precommitment—they gave $150 of their own money, along with a pledge to quit within six months. If they fulfilled their pledge, they’d receive their deposit of $150 and a $650 bonus.

The results showed success in 6% of Group A, 17% of Group B, and 52% of Group C. Although groups B and C received $800 total at the end of the study, Group C was exceptionally motivated because they risked losing their own money.

To create an effective price pact, attach a potential loss to distraction. For example, Eyal wanted to stop skipping out on his exercise regimen but nothing was working for him. He then attached a $100 bill to his workout schedule and created a pact: If he missed a gym session, he would light the bill on fire. Every time he thought about skipping the gym, the tangible loss made him rethink it.

In addition to triggering our loss aversion, price pacts transform the way you think about the outcome of distraction—rather than a vague future concept of lost time or lost productivity, the outcome is tangible in the present.

Imagine you wanted to finish your first draft of a book. You make a pact with a friend—you’ll give them $1,000 if you don’t finish by an agreed-upon date. Every time you think about skipping writing time, you’re faced with the thought of losing all that money. The fear of it gets you on task. On the other hand, trying to push through distraction by imagining potential disappointment wouldn’t be so motivating.

Four Warnings About Price Pacts

Price pacts can be exceptionally effective, but you have to be prepared for them. There are four warnings to consider:

1) Price pacts don’t work if you can’t remove external triggers. If you can’t circumvent external triggers that tempt you to become distracted, you won’t be able to find ways to stick to the pact—you’ll inevitably break it.

For example, a price pact can work for limiting social media use—you can turn off notifications, delete apps, and so on. It can’t help you stop biting your nails—you can’t get rid of your hands (a trigger), so you’ll likely repeatedly break the pact and eventually render it meaningless.

2) Price pacts are for short tasks. They work best when you just need a short, sustained bit of motivation to go the gym, ride out a cigarette craving, or turn off social media for a few hours. If the pact is too long, it becomes a punishment rather than a motivation.

For example, “I’m going to eat vegetables every day or give Paul $50” is too long-term and vague. Inevitably, you’ll come home after a long day of work to discover you don’t have any vegetables in the house. Either you break the pact, or the pact becomes a punishment as you resentfully drag yourself to the store. You could remedy this by creating a shorter task, such as, “I’ll buy three different vegetables every time I go to the store, or I’ll give Paul $50.”

3) Starting your price pact won’t feel good. You’ll resist making the pact or feel unsure about your decision if you finally do make the pact. Remember that you should feel anxious about losing your money—if you didn’t feel uncomfortable about the pact, it wouldn’t motivate you.

4) It’s crucial to be self-compassionate. Changing your behavior or trying to hack your motivation isn’t an easy feat—you’ll experience setbacks and failures. It’s important to be kind to yourself in these moments.

When you’re kind to yourself, you’re able to reflect on the reasons for your setback and make successful changes to your behaviors and methods.
On the other hand, if you feel that you’re a failure or unable to change, you’ll exacerbate the internal discomfort that leads to distraction and the issue will worsen. If you’re prone to beating yourself up, a price pact might not be for you.

Nir Eyal’s Precommitment Strategy: Price Pacts