Incentivizing behavioral change: the role of time preferences

Aggarwal, S and Zucker, A and Ross, R D (2020) Incentivizing behavioral change: the role of time preferences. Working Paper. NATIONAL BUREAU OF ECONOMIC RESEARCH.

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Abstract

How should the design of incentives vary with agent time preferences? We develop two
predictions. First, “bundling” the payment function over time – specifically by making the
payment for future effort increase in current effort – is more effective if individuals are impatient
over effort. Second, increasing the frequency of payment is more effective if individuals are
impatient over payment. We test the efficacy of time-bundling and payment frequency, and their
interactions with impatience, using a randomized evaluation of an incentive program for exercise
among diabetics in India. Consistent with our theoretical predictions, bundling payments over
time meaningfully increases effort among the impatient relative to the patient. In contrast,
increasing payment frequency has limited efficacy, suggesting limited impatience over payments.
On average, incentives increase daily steps by 1,266 (13 minutes of brisk walking) and improve
health

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
ORCiD
Aggarwal, S
UNSPECIFIED
Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Healthcare,Health Economics,Payment
Subjects: Health care and delivery
Finance > Personal Finance
Depositing User: Gurusrinivasan K
Date Deposited: 05 Jul 2020 03:23
Last Modified: 05 Jul 2020 03:23
URI: http://eprints.exchange.isb.edu/id/eprint/1369
Publisher URL: https://www.nber.org/papers/w27079
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