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Gym Membership

The market for gym memberships possesses a number of properties interesting from the perspective of behavioral economics: Customers pay for their memberships often long before they utilize the services, and they often end up utilizing gym services far more infrequently than they had planned to or would prefer. These properties lead to strategic responses both in the behavior of consumers and from health clubs (the businesses that provide gym facilities). In short, the time inconsistency of consumers results in many gym members forgoing financially optimal choices because of overly optimistic projections regarding their future likelihood of attending their health club. Businesses, on the other hand, benefit from the large proportion of consumers who pay for memberships but do not end up using them and can ...

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