Modern WisdomThe Behavioural Economics Of How We Spend Our Time | Koen Smets | Modern Wisdom 127
CHAPTERS
- 0:00 – 2:38
A speeding fine paid in time: the hook that reveals how we value an hour
Koen opens with a real-world experiment: drivers caught speeding are offered a choice between paying a monetary fine or waiting by the roadside for an hour. The split in choices becomes an immediate illustration that people price time very differently depending on context and circumstance.
- •Alternative speeding penalty: pay ~€400 or wait one hour
- •Roughly half of drivers choose to wait, half choose to pay
- •The choice exposes implicit ‘hourly rates’ and time preferences
- •Sets up the episode’s core theme: time as a scarce resource
- 2:38 – 5:43
Why behavioral economics should study time—not just tokens and cash
After introductions, Koen explains why time is an underused lens in behavioral economics. Money-based lab experiments often use small stakes, while time is universally scarce, equally distributed (24 hours/day), and constantly spent—making it potentially more revealing for studying decision-making.
- •Economics is allocation under scarcity; time is a core scarce resource
- •Lab money/tokens can be too small to mirror real-life stakes
- •Everyone gets the same 24 hours, regardless of wealth
- •Time can’t be spent twice; every choice has a trade-off
- 5:43 – 6:58
‘Time is money’—but not every minute is worth the same
The conversation challenges the assumption that time cleanly maps onto money. Koen argues that time’s value fluctuates with urgency, importance, and timing, and points to overtime pay and weekend premiums as everyday proof that time is not valued uniformly.
- •Time and money are linked, but not equivalent in value
- •The value of a minute depends on what else is happening
- •Overtime and weekend rates show time has variable pricing
- •Context determines whether time feels costly or cheap
- 6:58 – 9:28
How aging and life’s finiteness reshapes time valuation
Koen and Chris explore how perceptions of time change across the lifespan—from childhood’s seemingly endless summer to older age’s awareness of limited remaining years. Koen’s reflections on his 92-year-old father highlight that having ‘too much time’ without purpose can also be a burden.
- •Children often experience time as abundant and expansive
- •Older adults may perceive time as scarce and increasingly precious
- •Purpose matters: excess time without structure can feel empty
- •Willingness to pay/accept shifts with life stage and circumstances
- 9:28 – 12:53
Work time as ‘sold time’: why organizations waste hours in meetings
Koen explains how people treat work time differently from personal time—often as “sunk” once it’s been sold to an employer. A workshop example shows how teams underestimate the true cost of gathering people because they ignore the value of participants’ time, fueling meeting overload and low-salience waste.
- •Employees often treat work hours as no longer ‘theirs’
- •Teams underestimate costs by ignoring collective time value
- •Meeting-heavy days create the feeling of ‘I did nothing’
- •Time waste is common because time is less salient than money
- 12:53 – 16:43
Opportunity cost—why time hurts differently than money
Koen defines opportunity cost and shows how it applies to both money and time. The crucial difference: you can choose not to spend money, but you cannot choose not to spend time—making time losses feel inevitable unless you deliberately reclaim them.
- •Opportunity cost = what you forgo by choosing something else
- •Taxi-driver example: waiting time displaces earning time
- •You can save/hold money, but you can’t bank time in real life
- •Because time constantly passes, ‘doing nothing’ is still spending time
- 16:43 – 22:05
Awareness and deliberation: making time ‘salient’ enough to manage
The discussion moves from concept to behavior: people rarely compute the opportunity cost of time in everyday choices (e.g., driving farther for slightly cheaper petrol, daily traffic). Koen argues that once time becomes salient, you can act deliberately—using ‘dead time’ (travel, waiting) more intentionally.
- •Humans don’t optimize like Homo economicus; we act impulsively
- •We rarely calculate time costs (fuel discounts, commuting traffic)
- •Deliberation begins after awareness: noticing where time leaks
- •Examples of reclaiming downtime: podcasts while driving, working while waiting
- 22:05 – 25:24
Mental accounting for time: time-boxing, Parkinson’s Law, and stopping ‘good time after bad’
Koen introduces mental accounting—virtual ‘pots’ of money—and extends the idea to time. By dedicating fixed blocks to tasks, you prevent work from expanding indefinitely (Parkinson’s Law) and avoid continuing a task simply because you’ve already invested time in it.
- •Mental accounting: labeled budgets help people control spending
- •Time can be ‘earmarked’ similarly to reduce drift and overrun
- •Parkinson’s Law: work expands to fill the time allotted
- •Being deliberate can prevent wasting time on low-value continuation
- 25:24 – 30:53
Punishment that ‘fits the moment’: speeding delays, the EAST framework, and payment friction
Returning to the speeding example, Koen explains why a time-based penalty may work better than a later monetary fine: it’s immediate, emotionally connected to the behavior, and especially painful when the driver is already in a hurry. Chris connects this to payment methods: the less visceral the transaction (contactless/credit), the less accurately people track costs.
- •EAST framework: Easy, Attractive, Social, Timely interventions
- •Delayed fines weaken the behavior–consequence connection
- •Waiting penalties are immediate and target the motive (being late)
- •Payment friction parallels: cash vs chip-and-PIN vs contactless awareness
- 30:53 – 36:06
Why volunteering looks more virtuous than donating money (even when it’s less efficient)
Koen describes a study showing that third parties judge a donation of time as more praiseworthy than an equivalent donation of money. They explore why: time feels more universally comparable than wealth, and time donation also signals sacrifice in a way money often doesn’t—especially since time can’t be donated anonymously.
- •People rate time-donations as more valuable than money-donations
- •Time is more ‘equal’ across people; money depends on wealth reference points
- •Time donation is inherently conspicuous; money can be anonymous
- •Status/signaling can override efficiency (money could buy more local labor time)
- 36:06 – 44:25
Respecting others’ time: from home resentments to salaried-job inefficiencies
The conversation turns practical: asking others for time carries hidden costs that can harm relationships, especially when one person’s forgetfulness creates work for someone else. At work, those costs are muted because employees treat time as owned by the employer—creating fertile ground for inefficiency, adversarial attitudes, and meeting bloat.
- •Time requests at home can create resentment via opportunity cost
- •At work, ‘sold time’ reduces personal sensitivity to waste
- •Self-employed people often protect time more carefully
- •Company-card analogy: spending others’ resources reduces discipline
- 44:25 – 48:08
Externalities inside organizations: hidden time costs with no market signal
Koen introduces externalities as a way to understand internal organizational dysfunction. Decisions that look good for one function (e.g., procurement cost cuts) can create downstream burdens (e.g., lost supplier support), wasting time and effort elsewhere—often invisibly, because there’s no price mechanism to reveal the true cost.
- •Externalities: actions affecting third parties not in the transaction
- •Pollution example maps to organizational ‘process pollution’
- •Procurement savings can reduce supplier support, hurting operations
- •Lack of visibility makes wasted colleague time easy to ignore
- 48:08 – 54:17
Deadlines, trade-offs, and planning: using constraints without becoming ruled by them
Koen explains how deadlines make time salient and can drive completion, including self-imposed deadlines for writing and student submissions. But deadlines can also force suboptimal outcomes; the key is to weigh the cost of missing a deadline against the value gained from extra time, and to plan with deliberateness rather than rigid scheduling.
- •Deadlines create a mental countdown that can increase follow-through
- •Trade-off: on-time delivery vs improved quality with more time
- •Don’t become dogmatic—evaluate the real cost of being late (or early)
- •Planning = deliberateness and control, not necessarily a color-coded calendar
- 54:17 – 1:04:43
The value of doing nothing: mindfulness, ‘hands off the wheel’ meditation, and desert-island mental models
The episode closes by reframing ‘doing nothing’ as a purposeful practice that restores attention and control. Chris shares his current meditation approach (Do Nothing Meditation), and Koen answers the final prompt: three mental models he’d take to a desert island—cost-benefit analysis, optimism bias, and mindfulness.
- •Doing nothing can be valuable if chosen deliberately
- •Mindfulness as a way to fully experience environment and reduce boredom
- •Do Nothing Meditation: dropping the intention to control
- •Koen’s three models: cost-benefit analysis, optimism bias, mindfulness
