Every year, we resolve to hit the gym more often and get fit. And by the end of January, many of us have missed workouts or given up altogether.
According to Yifan Zhang, a 2010 graduate of Harvard College, part of the problem is that customers see gym membership fees as money spent, or “a sunk cost, especially if you pay at the beginning of the year.” That prompted the idea for Gym-Pact in Boston, which she created with Harvard classmate Geoff Oberhofer.
Gym-Pact offers what Zhang calls motivational fees — customers agree to pay more if they miss their scheduled workouts, literally buying into a financial penalty if they don’t stick to their fitness plans. The concept arose from Zhang’s behavioral economics class at Harvard, where professor Sendhil Mullainathan taught that people are more motivated by immediate consequences than by future possibilities.