Book contents
- The Handbook of Behavior Change
- The Handbook of Behavior Change
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Sidebars
- Contributors
- 1Changing Behavior: A Theory- and Evidence-Based Approach
- Part ITheory and Behavior Change
- Part IIMethods and Processes of Behavior Change: Intervention Development, Application, and Translation
- Part IIIBehavior Change Interventions: Practical Guides to Behavior Change
- 31Attitudes and Persuasive Communication Interventions
- 32Self-Efficacy Interventions
- 33Imagery, Visualization, and Mental Simulation Interventions
- 34Affect-Based Interventions
- 35Autonomy-Supportive Interventions
- 36Incentive-Based Interventions
- 37Monitoring Interventions
- 38Goal Setting Interventions
- 39Planning and Implementation Intention Interventions
- 40Self-Control Interventions
- 41Habit Interventions
- 42Economic and Behavioral Economic Approaches to Behavior Change
- 43Dyadic Behavior Change Interventions
- 44Social Identity Interventions
- 45Motivational Interviewing Interventions
- 46The Science of Behavior Change: The Road Ahead
- Index
- References
36 - Incentive-Based Interventions
from Part III - Behavior Change Interventions: Practical Guides to Behavior Change
Published online by Cambridge University Press: 04 July 2020
Book contents
- The Handbook of Behavior Change
- The Handbook of Behavior Change
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Sidebars
- Contributors
- 1Changing Behavior: A Theory- and Evidence-Based Approach
- Part ITheory and Behavior Change
- Part IIMethods and Processes of Behavior Change: Intervention Development, Application, and Translation
- Part IIIBehavior Change Interventions: Practical Guides to Behavior Change
- 31Attitudes and Persuasive Communication Interventions
- 32Self-Efficacy Interventions
- 33Imagery, Visualization, and Mental Simulation Interventions
- 34Affect-Based Interventions
- 35Autonomy-Supportive Interventions
- 36Incentive-Based Interventions
- 37Monitoring Interventions
- 38Goal Setting Interventions
- 39Planning and Implementation Intention Interventions
- 40Self-Control Interventions
- 41Habit Interventions
- 42Economic and Behavioral Economic Approaches to Behavior Change
- 43Dyadic Behavior Change Interventions
- 44Social Identity Interventions
- 45Motivational Interviewing Interventions
- 46The Science of Behavior Change: The Road Ahead
- Index
- References
Summary
This chapter provides a framework for how incentives affect behavior change. Economic theory is built on the premise that incentives matter, but empirical evidence shows the effect of incentives on behavior is more complicated than predicted by the basic law of demand. Our framework highlights four potential “channels” through which incentives can affect behavior change: First, incentives can help create “desirable” or “adaptive” habits by building up the stock of behavior. Increasing recent experience makes current behavior less costly and more enjoyable. Second, incentives can help “kill” undesirable or maladaptive habits by reducing the stock of behavior. Decreasing recent experience makes current behavior costlier and less enjoyable. Third, incentives can help counter present bias. Using frequent and regular incentives helps change behavior. Fourth, incentives can help remove barriers to change. Using incentives to reduce switching costs makes uptake of the desired behavior or activity cheaper or even free. These four channels and the supporting empirical evidence for them have implications for how incentive-based interventions work and provide guidance on how best to design them for optimal efficacy.
Keywords
Information
- Type
- Chapter
- Information
- The Handbook of Behavior Change , pp. 523 - 536Publisher: Cambridge University PressPrint publication year: 2020
References
Acland, D., & Levy, M. R. (2015). Naiveté, projection bias, and habit formation in gym attendance. Management Science, 61, 146–160. https://doi.org/10.1287/mnsc.2014.2091CrossRefGoogle Scholar
Adams, J., Giles, E., McColl, E., & Sniehotta, F. (2014). Carrots, sticks and health behaviours: A framework for documenting the complexity of financial incentive interventions to change health behaviours, Health Psychology Review, 8, 286–295. https://doi.org/10.1080/17437199.2013.848410Google Scholar
Aggarwal, S., Dizon-Ross, R., & Zucker, A. (2018). Incentivizing behavioral change: The role of time preferences. Unpublished manuscript, Chicago Booth University, Chicago, IL. http://faculty.chicagobooth.edu/rebecca.dizon-ross/research/papers/Incentive_Design.pdfGoogle Scholar
Allcott, H., & Rogers., T. (2014). The short-run and long-run effects of behavioral interventions: Experimental evidence from energy conservation. American Economic Review, 104, 3003–3037. https://doi.org/10.1257/aer.104.10.3003Google Scholar
Andreoni, J., Callen, M., Khan, Y., Jaffar, K., & Sprenger, S. (2016). Using preference estimates to customize incentives: An application to polio vaccination drives in Pakistan. NBER Working Paper No. 22019. www.nber.org/papers/w22019CrossRefGoogle Scholar
Angrist, J., Bettinger, E., Bloom, E., King, E., & Kremer, M. (2002). Vouchers for private schooling in Colombia: Evidence from a randomized natural experiment. American Economic Review, 92, 1535–1558. https://doi.org/10.1257/000282802762024629Google Scholar
Ashraf, N., Karlan, D., & Yin, W. (2006). Tying Odysseus to the mast: Evidence from a commitment savings product in the Philippines. Quarterly Journal of Economics, 121, 635–672. https://doi.org/10.1162/qjec.2006.121.2.635Google Scholar
Augenblick, N., Niederle, M., & Sprenger, C. (2015). Working over time: Dynamic inconsistency in real effort tasks. Quarterly Journal of Economics. 130, 1067–1115. https://doi.org/10.1093/qje/qjv020CrossRefGoogle Scholar
Bachireddy, C., Joung, A., John, L. K. et al. (2019). Comparing financial incentive structures for promoting physical activity: A randomized controlled trial. Unpublished manuscript, University of Pennsylvania, Philadelphia, PA. https://static1.squarespace.com/static/5353b838e4b0e68461b517cf/t/5b5760c82b6a28ce3b6a9745/1532453064822/Incentives_for_Physical_Activity_RCT_Manuscript_PNAS.pdfGoogle Scholar
Becker, G. S. (1992). Habits, addictions and traditions, Kyklos, 45, 327–345. https://doi.org/10.1111/j.1467-6435.1992.tb02119.xGoogle Scholar
Becker, G. S., & Murphy, K. M. (1988). A theory of rational addiction. Journal of Political Economy, 96, 675–700. https://doi.org/10.1086/261558Google Scholar
Brandon, A., Ferraro, P., List, J., Metcalfe, R., Price, M., & Rundhammer, F. (2017). Do the effects of social nudges persist? Theory and evidence from 38 natural field experiments. NBER Working Paper No. 23277. www.nber.org/papers/w23277Google Scholar
Burnham, T. A., Frels, J. K., & Mahajan, V. (2003). Consumer switching costs: A typology, antecedents, and consequences. Journal of the Academy of Marketing Science, 31, 109–126.CrossRefGoogle Scholar
Cappelen, A., Charess, G., Ekström, M., Gneezy, U., & Tungodden, B. (2019). Exercise improves academic performance. https://brage.bibsys.no/xmlui/bitstream/handle/11250/2452391/DP%2008.pdf?sequence=1Google Scholar
Carden, L., Wood, W., Neal, D. T., & Pascoe, A. (2017). Incentives activate a control mind-set: Good for deliberate behaviors, bad for habit performance. Journal of the Association for Consumer Research, 2, 279–290. https://doi.org/10.1086/695325Google Scholar
Carrera, M., Royer, H., Stehr, M., & Sydnor, J. (2017). The structure of health incentives: Evidence from a field experiment. NBER Working Paper No. 23188. www.nber.org/papers/w23188CrossRefGoogle Scholar
Charness, G., & Gneezy, U. (2009). Incentives to exercise. Econometrica, 77, 909–931. https://doi.org/10.3982/ECTA7416Google Scholar
Ehrenberg, A. S. C. (1991). New brands and the existing market. Journal of the Market Research Society, 33, 285–299. https://doi.org/10.1177/147078539103300402CrossRefGoogle Scholar
Falk, A., & Kosfeld, M. (2006). The hidden costs of control. American Economic Review, 96, 1611–1630. https://doi.org/10.1257/aer.96.5.1611CrossRefGoogle Scholar
Fehr, E., & List, J. A. (2004). The hidden costs and returns of incentives: Trust and trustworthiness among CEOs. Journal of the European Economic Association, 2, 743–771. https://doi.org/10.1162/1542476042782297CrossRefGoogle Scholar
Frey, B. (1997). Not Just for the Money: An Economic Theory of Personal Motivation. Cheltenham: Edward Elgar.Google Scholar
Friebel, G., Heinz, M., Krueger, M., & Zubanov, N. (2017). Team incentives and performance: Evidence from a retail chain. American Economic Review, 107, 2168–2203. https://doi.org/10.1257/aer.20160788CrossRefGoogle Scholar
Giles, E. L., Robalino, S., McColl, E., Sniehotta, F. F. & Adams, J. (2014). The effectiveness of financial incentives for health behaviour change: Systematic review and meta-analysis. PLoS ONE, 9, e90347. https://doi.org/10.1371/journal.pone.0090347Google Scholar
Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (don’t) work to modify behavior. Journal of Economic Perspectives, 25, 191–209. https://doi.org/10.1257/jep.25.4.191CrossRefGoogle Scholar
Gneezy, U., & Rustichini, A. (2000). A fine is a price. Journal of Legal Studies, 29, 1–18. https://doi.org/10.1086/468061CrossRefGoogle Scholar
Higgins, S. T., Washio, Y., Heil, S. H. et al. (2012). Financial incentives for smoking cessation among pregnant and newly postpartum women. Preventive Medicine, 55, S33–40. https://doi.org/10.1016/j.ypmed.2011.12.016Google Scholar
Homonoff, T., Willage, B., & Willén, A. (2020). Rebates as incentives: The effects of a gym membership reimbursement program. Journal of Health Economics, 70, 102285. https://doi.org/https://doi.org/10.1016/j.jhealeco.2019.102285CrossRefGoogle Scholar
John, L. K., Milkman, K. L., Gino, F., Tuckfield, B., & Foschini, L. (2018). The ineffectiveness of inconspicuous incentives: A field experiment on inattention. Unpublished manuscript, Harvard Business School, Cambridge, MA. https://static1.squarespace.com/static/5353b838e4b0e68461b517cf/t/5966320a86e6c01e1f7bdffe/149986971747/IncIncentivesSubmittedMSciBEDec2017.pdfGoogle Scholar
Kast, F., Meier, S., & Pomeranz, D. (2018). Saving more in groups: Field experimental evidence from Chile. Journal of Development Economics, 133, 275–294. https://doi.org/10.1016/j.jdeveco.2018.01.006CrossRefGoogle Scholar
Khare, A., & Inman, J. J. (2006). Habitual behavior in American eating patterns: The role of meal occasions. Journal of Consumer Research, 32, 567–575. https://doi.org/10.1086/500487CrossRefGoogle Scholar
Klemperer, P. (1987a). Markets with consumer switching costs. Quarterly Journal of Economics, 102, 375–394. https://doi.org/10.2307/1885068CrossRefGoogle Scholar
Klemperer, P. (1987b). The competitiveness of markets with switching costs. RAND Journal of Economics, 18, 138–150. https://doi.org/10.2307/2555540Google Scholar
Laibson, D. (1997). Golden eggs and hyperbolic discounting. Quarterly Journal of Economics 112, 443–477. https://doi.org/10.1162/003355397555253Google Scholar
Levitt, S. D., List, J. A., & Sadoff, S. (2016). The effect of performance-based incentives on educational achievement: Evidence from a randomized experiment. NBER Working Paper No. 22107. www.nber.org/papers/w22107Google Scholar
Meier, S. (2007). Do subsidies increase charitable giving in the long run? matching donations in a field experiment. Journal of the European Economic Association, 5, 1203–1222. https://doi.org/10.1162/JEEA.2007.5.6.1203CrossRefGoogle Scholar
Meier, S., & Sprenger, C. (2010). Present-biased preferences and credit card borrowing. American Economic Journal: Applied Economics, 2, 193–210. https://doi.org/10.1257/app.2.1.193Google Scholar
Mellström, C., & Johannesson, M. (2008). Crowding out in blood donation: Was Titmuss right? Journal of the European Economic Association, 6, 845–863. https://doi.org/10.1162/JEEA.2008.6.4.845CrossRefGoogle Scholar
Milkman, K. L., Minson, J., & Volpp, K. (2013). Holding the hunger games hostage at the gym: An evaluation of temptation bundling. Management Science, 60, 283–299. https://doi.org/10.1287/mnsc.2013.1784CrossRefGoogle Scholar
Neiman, B., & Vavra, J., (2018). The rise in household spending concentration. Available at SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3137782Google Scholar
O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89, 103–124. https://doi.org/10.1257/aer.89.1.103Google Scholar
Park, M. (2011). The economic impact of wireless number portability. The Journal of Industrial Economics, 59, 714–745. https://doi.org/10.1111/j.1467-6451.2011.00471.xGoogle Scholar
Read, D., & van Leeuwen, B. (1998). Predicting hunger: The effects of appetite and delay on choice. Organizational Behavior and Human Decision Processes, 76, 189–205. https://doi.org/10.1006/obhd.1998.2803Google Scholar
Royer, H., Stehr, M., & Sydnor, J. (2015). Incentives, commitments, and habit formation in exercise: Evidence from a field experiment with workers at a Fortune-500 company. American Economic Journal: Applied Economics, 7, 51–84. https://doi.org/10.1257/app.20130327Google Scholar
Sadoff, S., Samek, A., & Sprenger, C. (2014). Dynamic inconsistency in food choice: Experimental evidence from a food desert. Becker Friedman Institute for Research in Economics Working Paper No. 2572821; CESR-Schaeffer Working Paper 2015-027. Available at SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2572821##Google Scholar
Seetharaman, P. B. (2004). Modeling multiple sources of state dependence in random utility models: A distributed lag approach. Marketing Science, 23, 263–271. https://doi.org/10.1287/mksc.1030.0024Google Scholar
Strotz, R. H. (1956). Myopia and inconsistency in dynamic utility maximization. Review of Economic Studies, 23, 165–180. https://doi.org/10.2307/2295722CrossRefGoogle Scholar
Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, CT: Yale University Press.Google Scholar
Volpp, K. G., John, L. K., Troxel, A. B., Norton, L., Fassbender, J., & Loewenstein, G. (2008). Financial incentive-based approaches for weight loss: A randomized trial. Journal of the American Medical Association, 300, 2631–2637. https://doi.org/10.1001/jama.2008.804CrossRefGoogle ScholarPubMed
Volpp, K. G., Troxel, A. B., Pauly, M. V. et al. (2009). A randomized, controlled trial of financial incentives for smoking cessation. New England Journal of Medicine, 360, 699–709. https://doi.org/10.1056/NEJMsa0806819Google Scholar
Wood, W., Quinn, J. M., & Kashy, D. A. (2002). Habits in everyday life: Thought, emotion, and action. Journal of Personality and Social Psychology, 83, 1281–1297.CrossRefGoogle ScholarPubMed
Accessibility standard: WCAG 2.2 AAA
Why this information is here
This section outlines the accessibility features of this content - including support for screen readers, full keyboard navigation and high-contrast display options. This may not be relevant for you.Accessibility Information
The HTML of this chapter complies with version 2.2 of the
Web Content Accessibility Guidelines
(WCAG), offering more comprehensive accessibility measures for a broad range
of users and attains the highest
(AAA)
level of WCAG compliance, optimising the user experience by meeting the most extensive
accessibility guidelines.
Content Navigation
Table of contents navigation
Allows you to navigate directly to chapters, sections, or non‐text items through a linked table of contents, reducing the need for extensive scrolling.
Allows you to navigate directly to chapters, sections, or non‐text items through a linked table of contents, reducing the need for extensive scrolling.
Index navigation
Provides an interactive index, letting you go straight to where a term or subject appears in the text without manual searching.
Provides an interactive index, letting you go straight to where a term or subject appears in the text without manual searching.
Reading Order & Textual Equivalents
Single logical reading order
You will encounter all content (including footnotes, captions, etc.) in a clear, sequential flow, making it easier to follow with assistive tools like screen readers.
You will encounter all content (including footnotes, captions, etc.) in a clear, sequential flow, making it easier to follow with assistive tools like screen readers.
Full alternative textual descriptions
You get more than just short alt text: you have comprehensive text equivalents, transcripts, captions, or audio descriptions for substantial non‐text content, which is especially helpful for complex visuals or multimedia.
You get more than just short alt text: you have comprehensive text equivalents, transcripts, captions, or audio descriptions for substantial non‐text content, which is especially helpful for complex visuals or multimedia.
Visualised data also available as non-graphical data
You can access graphs or charts in a text or tabular format, so you are not excluded if you cannot process visual displays.
You can access graphs or charts in a text or tabular format, so you are not excluded if you cannot process visual displays.
Visual Accessibility
Use of high contrast between text and background colour
You benefit from high‐contrast text, which improves legibility if you have low vision or if you are reading in less‐than‐ideal lighting conditions.
You benefit from high‐contrast text, which improves legibility if you have low vision or if you are reading in less‐than‐ideal lighting conditions.