Karina often plans to go to an aerobics class at the gym but ends up staying home and watching Netflix instead. She recently joined a gym that requires members to reserve a space in a class before attending. If a member has reserved a space, but does not show up for the class, a fine of $15 is charged to the member's account. This penalty scheme is designed to combat:

Question

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The penalty scheme is designed to combat time inconsistent behavior, which refers to the tendency of people to change their plans or preferences over time, especially when it comes to preferring immediate gratification (like watching Netflix) over previously set long-term goals (like going to an aerobics class). The fine creates an immediate cost to not following through with the plan, thus aiming to align Karina's immediate decisions with her long-term intentions.

Karina Often Plans to Go to an Aerobics Class at the Gym