Temptation bundling: Meaning, Criticisms & Real-World Uses

What Is Temptation Bundling?

Temptation bundling is a behavioral economics strategy that combines an activity a person should do but finds undesirable or difficult with an activity they want to do and find instantly gratifying. This technique leverages immediate pleasure to motivate engagement in tasks that offer long-term benefits but require effort or self-control. The core idea of temptation bundling is to create a positive association, making the "should" activity more appealing by making it the gateway to the "want" activity. It falls under the broader category of behavioral finance, which studies the psychological influences on economic decision-making.

History and Origin

The concept of temptation bundling was introduced and rigorously evaluated by behavioral economist Katherine Milkman and her colleagues in a 2014 research paper. Inspired by her own struggles with procrastination and exercise, Milkman hypothesized that individuals could increase their engagement in "should" activities by pairing them with "want" activities. Her seminal study, "Holding the Hunger Games Hostage at the Gym: An Evaluation of Temptation Bundling," explored this idea through a field experiment. Participants were given tempting audio novels, but access was restricted to when they were exercising at the gym. The findings revealed that those in the temptation bundling group visited the gym significantly more often than control groups, demonstrating the effectiveness of this novel commitment devices.⁵

Key Takeaways

Temptation bundling involves strategically linking a desirable "want" activity with a less desirable "should" activity.
The goal is to increase engagement in beneficial, often difficult, tasks by making them contingent on access to an enjoyable activity.
This behavioral strategy helps individuals overcome present bias and challenges with willpower.
It is a cost-effective method for encouraging behavior change, requiring no financial incentives.

Interpreting Temptation Bundling

Temptation bundling is interpreted as a practical tool for improving personal effectiveness and achieving long-term savings goals by reframing the perceived utility of necessary but unappealing tasks. By making the less desirable activity a prerequisite for the highly desirable one, it creates a powerful incentive structure. The success of temptation bundling is often measured by the increased frequency or consistency of the "should" behavior. For example, if someone only allows themselves to watch their favorite streaming show while paying bills, the effectiveness of the bundle can be seen in how regularly and promptly they handle their finances. This strategy reduces the internal conflict between immediate gratification and delayed rewards, making the overall experience more positive.

Hypothetical Example

Consider an individual, Sarah, who finds reviewing her monthly budgeting and investment statements tedious but loves getting a specific gourmet coffee from a local cafe. To make financial review less burdensome, Sarah decides to implement temptation bundling. She commits to only purchasing her favorite coffee on days she spends at least 30 minutes reviewing her financial documents.

Here's how it plays out:

Identify "Should": Reviewing financial statements (often postponed).
Identify "Want": Enjoying a gourmet coffee (immediate pleasure).
Create the Bundle: "I will only buy my gourmet coffee if I first spend 30 minutes reviewing my financial statements."

Initially, the thought of the financial review might still be unappealing, but the anticipation of the coffee provides a strong motivator. Over time, Sarah finds herself looking forward to her "coffee day" and, by extension, the financial review becomes a more integrated and less dreaded part of her routine. This simple bundling helps her develop better financial planning habits.

Practical Applications

Temptation bundling finds practical application across various domains, particularly in fostering positive investment habits and personal finance discipline. For instance, financial institutions could encourage customers to engage in beneficial but often tedious activities like reviewing their portfolios or setting up automated savings by bundling them with desirable digital experiences. A financial app might offer exclusive access to premium content or a small cash bonus (a "want") only after a user completes a financial literacy module (a "should").

In a broader context, the technique can be used by individuals to:

Encourage saving: Only allow yourself to listen to your favorite podcast while transferring funds to your retirement savings.
Motivate learning: Read a chapter of an educational finance book while enjoying a favorite snack.
Improve financial wellness: Only allow yourself to browse social media while updating your financial spreadsheet.

One company, Moneythor, highlights how behavioral science, including temptation bundling, can be applied in banking to encourage better budgeting, increased savings, and smarter financial decision-making.⁴

Limitations and Criticisms

While an effective tool, temptation bundling has certain limitations and criticisms. One challenge lies in consistently enforcing the self-imposed rule. Individuals may struggle with the discipline to deny themselves the "want" activity if the "should" activity is too aversive or if the immediate gratification is too strong to resist outside the bundled context. As some researchers have noted, initial strong impacts may diminish over time, particularly after breaks in routine.³,²

Another limitation is that temptation bundling works best for activities that can be performed simultaneously or sequentially without significant interference. For example, it might not be suitable for tasks requiring deep concentration alongside a highly distracting "want." It also doesn't necessarily foster intrinsic motivation for the "should" activity itself; the motivation often remains external, tied to the "want." Some critics suggest that relying solely on external motivators might not build sustainable long-term habits or genuine enjoyment of the necessary task.¹ Additionally, the choice of "want" and "should" must be carefully considered to avoid creating new negative associations or reinforcing unhealthy behaviors. It's crucial that the "want" activity does not create its own opportunity cost that detracts from other important goals.

Temptation Bundling vs. Habit Stacking

Temptation bundling and habit stacking are both behavioral strategies aimed at fostering new routines, but they differ in their core mechanism. Temptation bundling specifically pairs a highly enjoyable, often indulgent, activity (the "want") with a less desirable but beneficial activity (the "should") to make the latter more appealing. The "want" acts as a direct reward or incentive for performing the "should." For example, only watching a specific TV show while exercising.

In contrast, habit stacking involves attaching a new desired behavior to an existing, established habit. It uses a trigger-response mechanism, where the completion of an old habit acts as the cue to initiate a new one. For instance, "After I finish my morning coffee (existing habit), I will meditate for five minutes (new habit)." Habit stacking focuses on integrating new behaviors seamlessly into an existing routine, whereas temptation bundling primarily focuses on overcoming aversion to a particular task by linking it to an immediate pleasure. While both leverage existing routines or desires, temptation bundling specifically addresses the conflict between immediate gratification and delayed rewards, often associated with present bias.

FAQs

Can temptation bundling be used for any financial goal?

Yes, temptation bundling can be applied to a wide range of financial goals, such as saving more, reducing debt, or learning about investing. The key is to identify a financial task you tend to avoid (the "should") and pair it with an enjoyable activity you frequently indulge in (the "want"). For example, you might only allow yourself to watch your favorite sports game while reviewing your monthly credit card statements.

Is temptation bundling a form of risk management?

While not a direct form of financial risk management, temptation bundling can indirectly contribute to better financial risk management by helping individuals develop disciplines that lead to healthier financial habits. By encouraging consistent engagement with tasks like budgeting and financial review, it can help prevent financial oversight or neglect that might otherwise lead to greater financial risk.

How is temptation bundling different from a reward system?

Temptation bundling differs from a traditional reward system in its timing and contingency. In a reward system, a reward is typically given after the completion of a task. With temptation bundling, the "want" activity is consumed during or simultaneously with the "should" activity, or immediately following it as a direct, exclusive prerequisite. The "want" is made contingent on the "should" in real-time, rather than being a separate, delayed incentive. This immediate linkage is what helps overcome procrastination.