Fitbit's Actual Secret to Success
It's economics
Would you become an insomniac to get a few extra steps in for your day? One Yale professor did.
The story seems ridiculous, but after this last month, I get it.
I read the story in Nir Eyal’s book Indistractable, but you can listen to it on YouTube. The professor was using an app called Striiv. You might be familiar with it, but this story was the first I ever heard about it. It’s like Duolingo for walking. On the app, you earn points through your steps. But sometimes you get special challenges, or steps are worth extra points. Like I wrote about with Duolingo, the app moves the reward for physical activity from the distant future to the present.
The professor’s problem was that the incentive structure became addicting. She would be headed to bed when she would get a notification that, for the next hour, steps were worth triple. Thinking she would take a few minutes to earn the points, she would find herself trapped taking steps until 2:00 AM.
I do not use Striiv, but one month ago I got a Fitbit. I explained in a video last year that I worry about sitting too much. I tried fixing this with a standing desk. But I still was not convinced that I was actually moving around enough. So, I got the Fitbit to track my steps.
I started taking more steps, and I thought I was falling into a similar psychological trap. But after thinking about it, I’m not sure it’s psychological at all.
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Since we’re talking about taking lots of steps, I wondered which road I could walk on to get the most steps.
The Economics of Fitbit
Think of physical activity just like any other good where there’s a marginal benefit curve and a marginal cost curve. The marginal benefit curve tells me how much benefit I get from additional steps. For the first few steps, my marginal benefit is super high because otherwise I’m stuck in my bed doing nothing. But as I get more and more steps, I’m not getting a ton of benefit per step. So marginal benefits slope down, just like your basic demand curve.
There’s also a marginal cost curve. As I take more steps, I think of two main costs. One, there’s the cost of physical exhaustion. This might be low at the beginning, but as I get more and more steps, exhaustion sinks in, so the marginal cost of additional steps increases. The second cost is the opportunity cost of time. My early steps are naturally incorporated into my day, so the opportunity cost is effectively zero. But if I want to go from 8,000 to 10,000 steps, that means I have to take some time out of my day to get those 2,000 steps. Generally, the marginal costs are increasing, so it’s like a supply curve.
Naturally, the optimal number of steps is where the marginal benefit equals the marginal cost. I’ve shown that in my amazingly high tech graph below with Steps* showing the optimal number of daily steps.
But this is where the economics lesson comes in.
I thought I probably was already hitting 10,000 steps a day. After all, I have my standing desk when I’m working, and when I’m not working I’m chasing kids. But I was wrong. The first thing I learned when I got the Fitbit was that I’m even more sedentary than I thought.
Why was I so wrong? Tracking how many steps you take is information, and information comes with a cost. It’s a non-monetary cost, but it still affects your decision. In economics, we call this a transaction cost.
Transaction costs shift your marginal cost curve up. In the next graph, I shift the marginal curve up to incorporate transaction costs of learning how many steps you take. The new curve intersects the marginal benefit curve at a lower number of steps.
In the graph, I’ve also highlighted a red triangle. These are the gains I’m missing out on because I don’t realize I’m not taking enough steps. Normally, we would call this deadweight loss. But since this is about my physical activity, we can call this my deadweight gain. It’s the reason why I have gained more weight than I want.
This reveals the secret of the Fitbit. It lowers the transaction cost of tracking steps. It shifts my marginal cost curve back and helps me find my optimum steps. So I take more.
People like to pitch this as a psychological trick, but it’s just economics.
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I was hoping you'd bring it all back together at the end by talking about how steps being worth 3x the points means that people are willing to pay a higher marginal cost (lost sleep) because MB increased! We need more S/D graphs in our lives.