Lack of Urgency Can Undermine a Popular Behavioral Nudge

Encouraging pre-commitment to a future behavior helps people do hard things — but it can backfire

One of the most pernicious behavioral biases is the struggle to make choices that require delayed gratification. We are not built to naturally — or easily — limit ourselves today (forgoing dessert, saving a dollar for retirement rather than spending it today) for a payoff that could be months, or decades, away.

The pre-commitment nudge addresses this tension by asking individuals to agree to embark on a good-for-you-but-difficult behavior sometime in the future. Given our outsize focus on the here and now, we’re more amenable to a change that we can schedule to start later.

Nearly 20 years ago, research published in the Journal of Political Economy, by University of Chicago’s Richard Thaler and UCLA Anderson’s Shlomo Benartzi, ignited one of the most practical and consequential implementations of pre-commitment. A field experiment confirmed employees weren’t typically game for increasing their retirement plan savings rate today but were receptive to increasing their 401(k) savings rate in the future. Specifically, participants had the choice to pre-commit to boosting their contribution rate every time they received a raise. Eighty percent of participants were still participating after four salary increases, and the average savings rate rose from 3.5% to 13.6%. That research helped propel the 2006 codification allowing auto-escalation of participant 401(k) contribution rates. Today, auto-escalation is embedded in in the majority of plans that automatically enroll new participants.

Urgency Matters in Decision-Making

Long after that work, a team of behavioral science academics that included Benartzi, along with UCLA Anderson’s Joseph S. Reiff, Ph.D. candidate, and Hengchen Dai, Harvard’s John Beshears and Wharton’s Katherine L. Milkman, stumbled upon a surprising nuance to the pre-commitment nudge that undermines its intended purpose.

Examining results from a field experiment, conducted in 2013-2014 that targeted more than 5,000 employees at four universities who weren’t participating in their retirement plan, the researchers saw a flaw in the pre-commitment approach. There were two types of nudges: One group was asked if they were ready to start saving immediately. Another group was given a savings choice: Would they like to start immediately or at some future date within the next several months? The expectation going into this research was that this “simultaneous” offer of save now or save tomorrow would be more effective than only offering the option to begin immediately.

It wasn’t.

In this real-world experiment, 7.5% of people who were asked if they wanted to increase their savings rate right now said yes, compared with 5.6% who opted for an immediate contribution boost when presented with the nudge to save more now or commit to saving more starting sometime in the future. The authors note that this group with the delay choice did not ultimately participate at a higher level than those in the control group. Effectively, the pre-commitment choice led participants to delay saving compared with those not given the nudge, which has obvious negative implications on nest-egg building.

The Fallout of Now-or-Later Framing

The fact that the now-or-later framing with both options presented side by side backfired ultimately shifted the research. The team set out to explore its theory that offering a choice to start contributing to the plan now or later implicitly conveyed that the folks in charge of the retirement plan were saying either was a good way to go. Three subsequent lab experiments supported the theory that when pre-commitment is offered side by side with immediate adoption it conveys a lack of urgency to adopt the behavior sooner.

One of the online experiments had nearly 2,600 participants imagine they were a new employee tasked with deciding if they wanted to sign up for three benefits they would contribute to through payroll deduction: a retirement plan, life insurance and a health savings account.

Some participants only had the option to sign up immediately for any of those benefits. Other participants were given the “Simultaneous Pre-Commit Nudge” that offered the choice to enroll immediately or the option to start in six months. The wrinkle was a third group that was presented with a two-step nudge: First they were offered the choice to sign up and start immediately. Then, if they did not sign up, they were then asked if they might be interested in starting in six months. The researchers referred to this choice architecture as “Sequential Pre-Commitment”; that is, participants were only offered the pre-commitment option after they had rejected the suggestion to start the desired behavior immediately.

What’s the Urgent Urgency?

All participants were also asked a few questions to gauge their sense of whether the employer was recommending enrolling ASAP, and whether the employer was imparting a sense of urgency in enrolling.

The “simultaneous” frame was the least effective framing. The group given both options side by side rated their employer’s imparted sense of urgency (on a scale of 1 to 7) at 4.55, which was lower than the 4.88 for the group presented with the option to get rolling immediately. The sequential nudge, which only offered pre-commitment after the participant turned down enrolling immediately, was most effective at conveying a sense of urgency, with an average score of 5.22.

And that sense of urgency seems to have implored more to adopt the desired behavior. On average, participants who were presented the “sequential” nudge sign up for an average of 2.14 of the three benefits. That was higher than the 1.86 of the group served only the choice to sign up immediately and the 1.84 for those given the side-by-side option to choose either immediate adoption or in six months.

Design Matters

In an article published in January 2023 in the Journal of Marketing Research, the researchers suggest, “To consumers, it is as if the marketer is saying, ‘either doing it now or later will suffice’” when offering two options side by side. The researchers’ central takeaway for anyone involved in choice architecture — benefit plan designers, public policy stakeholders, marketers, software engineers imploring users to update their system — is to consider prioritizing immediate adoption first, and only when that is rejected, offer a pre-commitment option. “It would be natural for consumers to infer that the marketer is not outright endorsing the ‘later’ option, but rather treating it like a contingency plan to ensure that if consumers do not adopt what the marketer is offering now, they will at least adopt the behavior at some point in the future.”

More generally, the authors recommend that researchers pilot the specific designs of their intervention before implementing them at scale — even for intervention ideas that previous research says should work.