Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend / How Your Brain Spends More When You Are Tired
Transcript
- Lucas: Have you ever noticed that the hardest decisions to make are the ones you face at the end of the day — and that you're way more likely to just say yes to something you'd normally resist? Luna: Oh, absolutely. By 8 p.m., I'm either ordering dinner I don't need or clicking 'buy' on something I barely want. It's like my brain checks out. Lucas: That's not just you being tired. There's a real behavioral economics concept for this, called ego depletion. The basic idea is that self-control is a limited resource — like a muscle that gets fatigued the more you use it. And the more decisions you make, the more your willpower drains. Luna: So every choice, even a tiny one, chips away at your ability to resist temptation later? Lucas: Exactly. The classic experiment on this was done by Roy Baumeister in the late 90s. He put people in a room with a plate of fresh-baked chocolate chip cookies and a bowl of radishes. Some participants were told they could eat the cookies, others were told they could only eat the radishes. Then, after that, he gave them an impossible puzzle to solve. Luna: And the radish group gave up way faster, right? Lucas: They gave up after about eight minutes on average, compared to about twenty minutes for the cookie group. The radish group had used up their self-control resisting the cookies, so they had less willpower left for the puzzle. That's the core finding: willpower is like a battery — you drain it with every act of resistance. Luna: And that translates directly to spending. If you've been making decisions all day — at work, on your commute, even just choosing what to eat — your resistance to an impulse buy is lower. Lucas: Right. There's a 2018 study in the Journal of Consumer Research that looked at this. They found that consumers who made a series of small, unrelated decisions — like choosing between different pens or picking a font — were 23 percent more likely to overspend on a subsequent purchase. That's a huge effect for something so trivial. Luna: 23 percent — so if you're spending $100 normally, decision fatigue pushes it to $123. Lucas: Exactly. And stores know this. That's why grocery stores put candy and magazines at the checkout. After you've made twenty decisions about which brand of cereal or which produce looks best, your willpower is shot. So that Snickers bar at the register suddenly looks very reasonable. Luna: Same with Amazon's one-click ordering, or the way they recommend things at the end of a long shopping session. They're capitalizing on your depletion. Lucas: Precisely. And it's not just about shopping. Judges, for example, are more likely to deny parole as the day goes on. One study of Israeli judges showed that favorable rulings dropped from about 65 percent in the morning to near zero right before lunch, then rebounded after the break. That's decision fatigue in action. Luna: So the practical takeaway is: make important financial decisions earlier in the day, when your battery is full. Lucas: That's a big one. Also, reduce the number of trivial decisions you make. Steve Jobs famously wore the same outfit every day — he was conserving his willpower for bigger things. You don't have to go that far, but automating things like what you eat for breakfast or what you wear can help. Luna: And if you're planning a big purchase, don't do it after a day of meetings or errands. Lucas: Right. Or if you're on a budget, set a rule: no non-essential purchases after 6 p.m. Or have a 'cooling off' period of 24 hours. That way, you're not relying on depleted willpower in the moment. Luna: It's also worth noting that there's been some debate about ego depletion. The original findings haven't always replicated cleanly. Lucas: That's true. In recent years, a large multi-lab replication project found a much weaker effect than Baumeister's original studies. Some researchers argue that willpower isn't a limited resource — it's more about motivation and attention. But even if the effect is smaller, the practical implications still hold: people who are tired or have made many decisions do tend to spend more. Luna: Yeah, the replication crisis doesn't mean the advice is wrong. It just means the mechanism might be more complex. Lucas: Exactly. And speaking of practical advice — you know, this show is ad-free, and it stays that way because of listeners who chip in a few dollars a month. If walking through the economy with us has made something click or helped you make a better decision, consider throwing a couple of dollars our way at buy me a coffee dot com slash fexingo. It genuinely makes a difference — keeps the lights on and the research flowing. Luna: Yeah, and it's not like we're asking for a subscription. It's just a small gesture that adds up. Lucas: Right. So, back to ego depletion — one more tactic that's backed by research: if you know you're going to face a tempting situation later, precommit. Leave your credit card at home, or set a spending limit ahead of time. That way, you're not making a decision when your willpower is at its lowest. Luna: So you're basically outsourcing the decision to your past self, who was fresh and rational. Lucas: Exactly. And that's a powerful strategy because it acknowledges that your future self is going to be tired and weak. So you lock in the good choice now. Luna: I've actually done that with online shopping — I put things in my cart but force myself to wait until the next morning to check out. And more often than not, I don't want them anymore. Lucas: Classic. The desire evaporates overnight because your willpower is recharged and your rational brain is back online. So the big takeaway from today: if you want to spend less, pay attention to when you're making decisions. Your brain's battery matters. Luna: And if you want to nudge yourself, automate what you can and postpone what you can't. Lucas: That's it for this episode. Next time, we'll look at how your brain processes regret — and why it might make you hold onto losing investments longer than you should.