3BI: Resolutions Check-in, Food Labels, Dustin Hoffman’s Mental Accounting
Welcome to my 3BI newsletter, where I share three insights from the world of behavioral science on psychology, decision-making, and behavioral change.
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Hello everyone! Back after spending last week in Colorado getting some skiing and mountain air.
Check-in on your Resolutions
A little over two months ago, many of us used the dawn of the new year to reflect and set resolutions for our intentions to change in 2025. Now, it’s already March and most are frustrated with their lack of progress or have even abandoned the goals altogether.
A big problem with new year’s resolutions is that they have a clear starting point but lack a defined process to follow-up. It’s easy to reflect and set intentions at the end of the year when the holiday season is in full swing, but it’s hard to keep those intentions top of mind with the hustle and bustle of our normal lives.
We can counteract this in two ways, according to economist Tim Harford.
Leverage the Fresh Start Effect Again
The whole reason we set resolutions at the new year is because it’s a natural time for reflection and new beginnings. This is because of the Fresh Start Effect, where people are more motivated to pursue goals and make changes at landmark dates that create a feeling of starting anew. New Year’s is the most common of these landmarks, but other times like birthdays or even the start of a week can also facilitate such a mental reset. If the New Year is the most natural time to set goals, we can leverage the effect to follow up on them:
But if the first of January is an attractive time to make a resolution, when is a good time to reflect on your old resolutions, particularly the ones that have crumbled under pressure? One possibility is to set quarterly goals — for work, fitness, fun, whatever — and to review the old goals when setting new ones at the end of the quarter.
Figure out what times work for you as a “fresh start” and use them to evaluate your progress.
Reflect with Self-Regulated Learning.
To reflect on our progress, we can borrow an idea from educational psychology. “Self-regulated learning” is a process in which learners take active control over their own learning by setting personal goals, monitoring progress, and adjusting strategies to achieve desired outcomes. We can do this for our own behavior change by asking some simple questions:
“...ponder the following three questions that anybody should ask themselves about their resolutions. What am I doing? How is it going? What do I need to change?
…
If you find yourself flatly failing to keep a particular resolution, it’s useful to think about why. What exactly is stopping you? Is there a different angle that might work better? White-knuckle willpower hasn’t worked before (it rarely does), so what might work instead?”
Read more at Tim’s blog or the Financial Times.
Food Labels aren’t System 1 Friendly
Something that I find is generally not designed in a way that’s optimized for our psychology is food labeling. Take the dates given for food quality. How do you know when a food is likely to have gone bad?
Current labels are often inconsistent and unclear.
It turns out, that’s because they aren’t even made for consumers. From the San Francisco Chronicle:
There’s no standardization for any of the dates you see on food packaging — and none of those dates has anything to do with the food’s safety.
In fact, they aren’t intended for consumers at all.
“Sell-by dating is normally intended for use in the store and for the store to know when to sell that product by,” said Meredith Carothers, a public affairs specialist with the Food Safety and Inspection Service of the U.S. Department of Agriculture. Specifically, it indicates the “best quality for selling it in the store, not best quality in general.”
The other date labels you often see — “best by,” “use by” — also are not intended to tell you when your food has gone bad.
This is a good example of information sparking different systems of thinking. Dual Process Theory is a framework in cognitive psychology organizing how humans think and make decisions into two distinct systems of thought:
System 1, or the Automatic System is a fast, automatic, and intuitive mode of thinking that relies on heuristics and mental shortcuts.
System 2, or the Reflective System, is slower, deliberate, and analytical while utilizing conscious reasoning, effortful processing, and logical analysis.
Consumer labeling is an area that should be optimized for System 1. Labels should be intuitive and not require a pause to evaluate their meaning. Poor labeling leads to 84% of consumers discarding food near its package date, resulting in $165 billion in food waste. Thankfully, changes may be coming to do just that:
California will be the first state in the nation to require labeling standards that aim to cut down on food waste.
Under Assembly Bill 660, starting in July 2026, only two types of date labels will be allowed on food: “Best if used (or frozen) by,” which will indicate peak quality and freshness, and “Use by,” which will indicate safety.
Manufacturers can still include information for food sellers about when to rotate products on the shelves, but the phrase “sell by” will no longer be allowed to appear, and the date should not be easily readable to consumers.
California’s effort will provide a sizable experiment in how label changes impact food waste that, hopefully, can inspire broader standards and improvement.
Read more at the San Francisco Chronicle.
Dustin Hoffman’s Mental Accounting
Legendary actor Gene Hackman passed away last week at the age of 95. While his contributions to film are obvious, he’s also notable to behavioral economists for his demonstration of “mental accounting” - our tendency to treat resources like money and time as if they aren't fungible. We create artificial "mental accounts" to help us keep track of resources and avoid overspending.
In the clip, Hackman explains how a young, up and coming Dustin Hoffman kept jars of money with different labels (rent, entertainment, food, etc.) in his house and wouldn't take money out of a jar with one label to pay for expenses in another category. So when he ran out of food money, he went to Gene Hackman for a loan despite there being plenty of money in other jars. His mental accounting wouldn’t allow for moving money between jars. I respect the discipline!
HT to Katy Milkman.
Other Stuff
The Oscars were last Sunday and Anora walked away as the big winner, which was one of my personal favorites of last year, as well, alongside other winners like The Brutalist and Dune Part 2. Here’s a full list of my favorite movies from 2024. Also, a good read on how indie studio Neon pulled off the win.
RIP Eleanor Maguire, an expert and researcher on memory who recently passed away. She famously studied the memory and neuroscience of London cabbies, which I wrote about in a recent edition.
Gen Z and the End of Predictable Progress - how AI, volatility, and changing institutions are shaping young people's economic reality.