In the final paragraph of Misbehaving, Nobel laureate Richard Thaler foretells the disappearance of behavioural economics, when “all economics will be as behavioural as it needs to be”. This is not surprising. Economics is concerned with choices around optimum allocation of scarce resources and mutually beneficial trade, two key determinants of people’s behaviour; behavioural science seeks to explain people’s behaviour by understanding how they choose to allocate scarce resources and to trade with each other.
Money is an obvious example of a scarce resource that is used to facilitate trading, but there is another scarce resource that interacts in perhaps an even more profound manner with our behaviour: time. There is little doubt that it is scarce – if I had got a dollar for every time I heard someone (and myself!) wish they had more time, I’d probably be able to afford to pay someone else to write this post.
Because of this scarcity, we experience several similarities between time and money. One of those is a phenomenon known as mental accounting. We tend to categorize income and expenditure in our head, and distinguish between a dollar earmarked for eating out and one intended for buying groceries, or a dollar received as a gift (or a tax refund) and one earned as part of our salary. We tend to do the same with time. Sometimes the categorization is imposed by social norms or physical constraints – we can only go to the shops when they’re open, and have Zoom calls with people eight time zones away when they are awake.
But even if that is not the case, we don’t treat all minutes in the same way. Imagine two near-identical car journeys of 200km, which takes us typically between an 1h 45 and 2h 15, depending on what traffic is like. On the first journey, the road is quite busy, but there are no incidents, and we realize an average speed of 100 km/h, arriving after exactly two hours. On the second one, there is very little traffic so we comfortably average 110km/h, on course to arrive after about 1 h 50. Then, less than 1 km from our destination, we get stuck behind broken-down car. The whole episode costs us ten minutes, making the journey exactly as long as the first one: two hours. Yet our perception is very different. Ten minutes spread out over the entire journey is added to the general ‘travel time’ mental account, while ten minutes specifically associated with a blocked street goes to the ‘incident delay’ account. To make matters worse, the intensity of our annoyance with the delay is much greater than that of the pleasure we were anticipating in arriving ten minutes ‘early’. That is a case loss aversion, something that is also generally associated with material goods or money, but which clearly applies just as much to time.
Another phenomenon that we can observe with time as much as with money is anchoring. Say we need to discuss something with a colleague and we want to set up a meeting. “How much time do we need,” she asks, “two hours?” At that point, unless we had a very strong reason to insist on a different duration, we are very likely to stick with her suggestion, or something very close. Along similar lines we find the default effect, facilitated by calendars which for years have helpfully suggested that a meeting should last 1 hour unless otherwise specified. Even though both Outlook and Google Calendar have long been offering 30-minute slots by default, I bet that the vast majority of meetings in your diary are at least one hour long. But why round up to 30 minutes, and not consider 20 minutes, or 45 minutes? How often is a meeting finished early, and how much time do we really waste by filling all the time?
There are also differences between time and money. Maybe one of the reasons why we tend to be less careful with our time than with our money is that time appears to come for free: every day when we wake up, there is another 16 hours awake ahead of us. Just like in a Monopoly game, all we need to do is pass Go, and we don’t even have to worry about going to jail, or having to go back a number of steps. Things that appear free feel less precious.
But of course, time is valuable, and we can benefit from allocating it better. The challenge is that, unlike its material companion money, it is fleeting: it passes, and we cannot – as the late Jim Croce used to sing – save time in a bottle and use it later. We need to use what we have right now. When it’s gone it’s gone.
There is a way in which we might improve our use of time, though. When we see a $50 dollar bill in our wallet, we would not normally look for a way to spend it as quickly as possible. But that is precisely what might help us be more efficient with our time. When we have half an hour, or even just five minutes, available – what can we spend it usefully on? Small tasks – reply to an email, check the train times, locate an old a file on our computer – can be efficiency killers if we engage in them at random, but if we slot them in small fragments of time that would otherwise just be wasted, we have done ourselves a favour.
This idea – doing someone a favour – is perhaps the way in which time is the most valuable. We can offer our time to someone else, because time, like money, can be used to trade, but it is less like a commercial transaction, and more like trading favours. When we need some help – whether at work or in our private lives – what others really give us is their time. Resolving a customer query, telling a colleague about an experience you’ve had that is relevant to what they’re working on, checking over a report, offering to cook dinner even though it’s not your turn, giving someone a lift and making a detour to drop them at their doorstep to save them walking through the pouring rain… you name it – always, the currency in which the favour is made is time.
And that sacrifice of time, the ultimate scarce resource, people make to serve someone else is a very significant behavioural signal. Giving other people our time – more than any material exchange – is not just a lubricant for social interaction, but can build up social capital and loyalty, enhance our reputation and activate reciprocity, one of the strongest determining factors of human behaviour. We are more likely to remember that someone sacrificed fifteen minutes of their time to help us, than that they took us out for lunch.
The beauty is that, every morning, everyone receives an endowment of time, some of which we can spend on others. It’s up to us to decide how, and for whom, we spend it.
This article was written by Koen Smets, an Organizational Development Consultant and an accidental Behavioural Economist and trusted Senior Advisor at the BVA Nudge Unit.