The History and Economics of New Year's Resolutions



Dear Friends,

I would like to wish you a very great year ahead!!!

Have a good 2009!



The History of New Year's Resolutions

By Ryan Blair

The tradition of the New Year's Resolutions goes all the way back to 153 B.C. Janus, a mythical king of early Rome was placed at the head of the calendar.

With two faces, Janus could look back on past events and forward to the future. Janus became the ancient symbol for resolutions and many Romans looked for forgiveness from their enemies and also exchanged gifts before the beginning of each year.

The New Year has not always begun on January 1, and it doesn't begin on that date everywhere today. It begins on that date only for cultures that use a 365-day solar calendar. January 1 became the beginning of the New Year in 46 B.C., when Julius Caesar developed a calendar that would more accurately reflect the seasons than previous calendars had.

The Romans named the first month of the year after Janus, the god of beginnings and the guardian of doors and entrances. He was always depicted with two faces, one on the front of his head and one on the back. Thus he could look backward and forward at the same time. At midnight on December 31, the Romans imagined Janus looking back at the old year and forward to the new. The Romans began a tradition of exchanging gifts on New Year's Eve by giving one another branches from sacred trees for good fortune. Later, nuts or coins imprinted with the god Janus became more common New Year's gifts.

In the Middle Ages, Christians changed New Year's Day to December 25, the birth of Jesus. Then they changed it to March 25, a holiday called the Annunciation. In the sixteenth century, Pope Gregory XIII revised the Julian calendar, and the celebration of the New Year was returned to January 1.

The Julian and Gregorian calendars are solar calendars. Some cultures have lunar calendars, however. A year in a lunar calendar is less than 365 days because the months are based on the phases of the moon. The Chinese use a lunar calendar. Their new year begins at the time of the first full moon (over the Far East) after the sun enters Aquarius- sometime between January 19 and February 21.

Although the date for New Year's Day is not the same in every culture, it is always a time for celebration and for customs to ensure good luck in the coming year.

Ancient New Years

The celebration of the New Year is the oldest of all holidays. It was first observed in ancient Babylon about 4000 years ago. In the years around 2000 BC, Babylonians celebrated the beginning of a new year on what is now March 23, although they themselves had no written calendar.

Late March actually is a logical choice for the beginning of a new year. It is the time of year that spring begins and new crops are planted. January 1, on the other hand, has no astronomical nor agricultural significance. It is purely arbitrary.

The Babylonian New Year celebration lasted for eleven days. Each day had its own particular mode of celebration, but it is safe to say that modern New Year's Eve festivities pale in comparison.

The Romans continued to observe the New Year on March 25, but their calendar was continually tampered with by various emperors so that the calendar soon became out of synchronization with the sun. In order to set the calendar right, the Roman senate, in 153 BC, declared January 1 to be the beginning of the New Year. But tampering continued until Julius Caesar, in 46 BC, established what has come to be known as the Julian Calendar. It again established January 1 as the New Year. But in order to synchronize the calendar with the sun, Caesar had to let the previous year drag on for 445 days.

Chinese New Year

Except for a very few number of people who can keep track of when the Chinese New Year should be, the majority of the Chinese today have to rely on a typical Chinese calendar to tell it. Therefore, you cannot talk of the Chinese New Year without mentioning the Chinese calendar at first.

A Chinese calendar consists of both the Gregorian and lunar-solar systems, with the latter dividing a year into twelve month, each of which is in turn equally divided into thirty- nine and a half days. The well-coordinated dual system calendar reflects the Chinese ingenuity.

There is also a system that marks the years in a twelve-year cycle, naming each of them after an animal such as Rat, Ox, Tiger, Hare, Dragon, Snake, Horse, Sheep, Monkey, Rooster, Dog and Boar. People born in a particular year are believed to share some of the personalities of that particular animal.

The Sounds of Happy New Year

With the holiday season upon us, here's a list that's sure to be a tongue twister. See how Happy New Year is pronounced around the world.

Arabic: Kul 'aam u antum salimoun

Brazilian: Boas Festas e Feliz Ano Novo means "Good Parties and Happy New Year"

Chinese: Chu Shen Tan

Czechoslavakia: Scastny Novy Rok

Dutch: Gullukkig Niuw Jaar

Finnish: Onnellista Uutta Vuotta

French: Bonne Annee

German: Prosit Neujahr

Greek: Eftecheezmaenos o Kaenooryos hronos

Hebrew: L'Shannah Tovah Tikatevu

Hindi: Niya Saal Moobarak

Irish (Gaelic): Bliain nua fe mhaise dhuit

Italian: Buon Capodanno

Khmer: Sua Sdei tfnam tmei

Laotian: Sabai dee pee mai

Polish: Szczesliwego Nowego Roku

Portuguese: Feliz Ano Novo

Russian: S Novim Godom

Serbo-Croatian: Scecna nova godina

Spanish: Feliz Ano Neuvo or Prospero Ano Nuevo

Turkish: Yeni Yiliniz Kutlu Olsun

Vietnamese: Cung-Chuc Tan-Xuan

Auld Lang Syne

The song, "Auld Lang Syne," is sung at the stroke of midnight in almost every English- speaking country in the world to bring in the New Year. In spite of the popularity of 'Auld Lang Syne', it has aptly been described as the song that nobody knows. Even in Scotland, hardly a gathering sings it correctly, without some members of the party butchering the words.

Written by Robert Burns in 1741, it was first published in 1796 after Burns' death. "Auld Lang Syne" literally means "old long ago," or simply, "the good old days."

Auld Lang Syne by Robert Burns

Should auld acquaintance be forgot,

and never brought to mind?
Should auld acquaintance be forgot
and days of auld lang syne?

For auld lang syne, my dear,

For auld lang syne,
We'll take a cup o' kindness yet
For auld lang syne

We twa hae run aboot the braes

And pou'd the gowans fine;
we've wander'd mony a weary foot
Sin' auld lang syne

We two hae paidled i' the burn,

Frae mornin' sun till dine;
But seas between us braid hae roar'd
Sin' auld lang syne

And here's a hand, my trusty friend,

And gie's a hand o' thine;
We'll take a cup o' kindness yet
For auld lang syne

Should auld acquaintance be forgot,

and never brought to mind?
Should auld acquaintance be forgot
and days of auld lang syne?

For auld lang syne, my dear,

For auld lang syne,
We'll take a cup o' kindness yet
For auld lang syne



The Economics of New Year's Resolutions


Most of New Year's resolutions tell a same story. Time Element and preference, the principle that people, to varying points, tend to prefer satisfaction now over satisfaction later. Here, I am compiling two short articles on same.


First Part by Mike Moffatt ( and 2ND is from CNN news dated 31 Dec 2008.


1st Part –


One of concepts in game theory is the idea of a "strategic precommitment". A strategic precommitment is a commitment to a typically unpleasant action or ouctome unless a specific objective is reached. Strategic precommitments can often be very dramatic:

A man walks into a bank and shows the teller that he's strapped with dynamite. He announces that if he does not receive $10,000 in cash that he'll detonate the explosives, killing himself and everyone else in the bank.

In this example the man has committed himself to a rather unpleasant act, in order to increase his bargaining power and his chances of receiving his desired outcome. For any such strategic precommitment to work, the following two factors must be in play:

1.      There must be a set of actions that the actors can take in order to make the desired outcome happen. In our example, there must be a way in order for the bank to give this man $10,000.

2.      The threat, in this case the threat to explode the dynamite, must be credible. If the bank does not believe that the robber will carry through with his threats, then the strategic precommitment will fail. In this instance, the robber may have to work to convince the bank that he really will blow himself up if he does not receive the money.

What does any of this have to do with New Year's? Virginia Postrel's A Nobel Winner Can Help You Keep Your Resolutions shows the link between game theory and New Year's:

WHY make New Year's resolutions? If you need to start a diet or get up earlier in the morning, why wait until Jan. 1? Why not do it today? New Year's resolutions do not make any rational sense.

While perfectly logical, that analysis misses the point. New Year's resolutions help people cope with some of the most difficult conflicts human beings face.

So argues one of the economics profession's greatest experts on conflict, Thomas C. Schelling, who shared this year's Nobel in economic science for, in the words of the citation, "having enhanced our understanding of conflict and cooperation through game-theory analysis."

Professor Schelling, now a professor emeritus at the University of Maryland, is famous for his work on conflicts between nation-states, particularly those with nuclear weapons.

One of his best-known ideas is "precommitment." One party in a conflict, he demonstrated, can often strengthen its strategic position by cutting off some of its options to make its threats more credible. An army that burns its bridges, making retreat impossible, is a classic military example.

Others involve strong diplomatic commitments. By passing a law saying the United States will defend Taiwan if it is attacked, for example, Congress gives future administrations less flexibility in dealing with a crisis, but the threat makes an attack less likely.

In the early 1980's, Professor Schelling applied similar analysis to individuals' internal struggles, seeking to develop what he called "strategic egonomics, consciously coping with one's own behavior, especially one's conscious behavior."

The Moffatt System for New Year's Resolutions

1.      Pick a few resolutions you absolutely want to keep. They can be as many or as few as you'd like, but I'd try to keep it as small as possible. I picked 10, which is probably excessive; I'd recommend 5 or less if this is the first time you've done it.

The resolutions can be anything you want, but they all must have one key property: They all must be something you can measure. "I'll go to the gym more often" is not an acceptable resolution under this system, but "Go to the gym at least 10 times every month" is. Half of my 10 resolutions are fitness related goals, such as "At some point in 2006, I will run 10K in under 50 minutes".

In every article or book on resolutions, psychologists always recommend having goals where you can tell if you are suceeding or not. Under this system, knowing if you've succeeded or not is crucuial, as we will make a strategic precommittment which will be used if the goal is not met.

2.      Pick a sum of money you will pay for each goal that is not met. It must be something that is painful to give up (in order to inspire you to meet your goal), but it must at the same time be plausible. In my case, I will pay $400 for each goal that is not met. This is a painful amount of money for me, particularly if I miss all my goals, but is one that could be given up without dire consequences to my family.

3.      Make a list of friends that you are comfortable sharing your goals with.

Divide the amount of money by the amount of friends. In a case, $400/20 = $20 per person. You may want to adjust the number of dollars or the number of friends so this works out to a round number. Then send a personal letter to each of those friends announcing that you will pay each of them the dollar amount you calculated for each goal that is missed. You'll also want to add a few conditions under which such a promise becomes void

If you follow this system based on strategic precommitments you will have more successes than if you do not. The strategic precommitment works here since I picked goals for myself which are attainable and that my threat is credible; keeping my word is more valuable to me than the money involved and my friends know that. There are couple of positive side effects to this plan as well:

1.      It makes your resolutions far more realistic. Perhaps the biggest problem we have when we make New Year's Resolutions is that we pick things we cannot possibly achieve then get upset with ourselves when we do not meet those goals. Since we're paying money if we do not meet our goals (though I like to think of it as getting rewarded for success!), we're far more likely to make goals that we can actually accomplish. There's no better feeling that accomplishing something you set out to do; such successes do not happen when you set unrealistic goals.

2.      It gets your friends involved. I've found that while my friends might joke or laugh about getting $20 (or whatever sum you set), they are really interested in seeing you succeed. But they will constantly remind you of your goals and the money, which will help you stay focused with all of life's other distractions.


2nd Part -

Putting a price on procrastination

CNN) -- David Laibson knows that when he procrastinates, mere deadlines are not always enough to get him going. So, when this Harvard economics professor collaborates on a major project, he'll sometimes promise to deliver a finished product by a certain date -- or else pay his co-authors $500.

"There are a lot of behavioral economists who really do say that, and really do pay," says Laibson, who studies the psychological factors that play into economic decisions.

It's not just academics who set up monetary contracts to fight procrastination., founded by Yale University economics professor Dean Karlan and two colleagues, helps people fulfill their goals by allowing them to risk their own money -- if they don't complete their self-described objectives, they lose the money.

"It's a contract to make slothfulness more expensive," said Karlan, who has personally put up to $50,000 at stake to help himself lose or maintain his weight.

The site will soon have its first New Year's week, when people are making their resolutions for 2009., which launched at the end of January 2008, has about 30,000 registered users, Karlan said.

Goals on range from the practical "stop biting nails" to the ambitious "successful startup" to the competitive "lose weight faster than Nate" to the creative "speaking more slowly to foreigners in NYC."

Why do we keep putting things off?

Economists say there is substantial evidence that humans naturally procrastinate because of inherent impulsiveness.

More specifically, says Laibson, people perceive rewards and costs as having only half the weight tomorrow that they have today. In other words, unpleasant chores feel only half as bad when we imagine doing them tomorrow, versus actually doing them today.

"Pushing costly, unpleasant tasks into the future is like a getting a 50 percent discount on them, psychologically," Laibson said. "When you actually arrive at that future date, you'll once again face the same problem."

How, then, can we fulfill our sometimes-unpleasant New Year's resolutions, such as losing weight or kicking a bad habit? The economists answer: Put a price on it. came about as a result of the theoretical work of Laibson and others on commitment contracts, Karlan said. The idea is that many people, such as Laibson with his $500 wager, will follow through with their goals if they are risking their own money. users set up whatever goals they like, and have the option of putting as much money as they want at stake. They can also designate a "referee" who receives e-mails when users report they've made progress. The second "k" in the name stands for "contract."

Forfeited money from unfulfilled promises goes to a charity or, depending on the user's preference, an "anti-charity" -- one the user doesn't support. For example, a person who feels strongly against abortion can designate the NARAL Pro-Choice America Foundation as the recipient of the money if he or she does not meet a personal goal.

About 85 to 90 percent of users fulfill their contracts, but Karlan cautions that each person's progress is self-reported. He also noted that some people may feel better about not making good on their promises if they opt to send their forfeited money to a good cause.

The company will soon be giving forfeited money to a nonprofit that works with families whose houses have been foreclosed, he said.

Why laziness means less money

Apart from these explicit contracts, research shows that people often lose money because of procrastination and self-control issues.

Delaying things such as opening a savings account or putting money into a 401(k) can have long-term consequences that could be avoided by acting earlier. A slew of economic literature suggests that small interventions -- such as having a portion of your paycheck automatically put in a retirement account -- can result in large long-term benefits. And you're more likely to have a retirement account in the first place if it's the default and you don't have to opt in.

"It's clear that people delay choices that are beneficial to them ... if they're not the default," said Stefano DellaVigna, associate professor of economics at the University of California-Berkeley.

In a study on gym attendance, published in the American Economic Review in 2006, DellaVigna and colleagues looked at people who chose $80 monthly gym memberships over paying $10 a visit. These monthly members actually went to the gym only once a week, meaning they wasted $40 a month because of excessive optimism about how often they'd go.

Moreover, DellaVigna found a spike in gym enrollments around the start of the new year, but the dedication didn't last -- the new subscribers tended to go to the gym more than others for a month or two, and then their attendance dropped off to the lowest.

The bottom line is that people are overly optimistic, he said. If you're going to try to go to the gym more often, he recommends asking your gym of choice if it has the pay-per-visit option so you can monitor your own attendance before committing to the monthly contract.

Finally, you can override your short-term impulses by committing yourself to something a week ahead of time, said Laibson.

"Don't try to talk yourself into being a better person. Simply commit yourself in advance," he said.

Sudesh Kumar | sudeshkumar.comTel: +44 (0) 2031180680  | Cell: +44 (0) 7981743648    



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