Authors
Shilpa Aggarwal, Rebecca Dizon-Ross, Ariel Zucker
Publication date
2022/7/8
Publisher
Unpublished
Description
Many people are impatient. We develop a prediction for how to make incentives work particularly well when people are impatient over effort: implement “time-bundled” contracts that make the payment for future effort increase in current effort. We test and find empirical support for this prediction using a randomized evaluation of an incentive program for exercise (walking) among diabetics in India. On average, time-bundled contracts generate as much effort as linear contracts, yet at a reduced cost. Moreover, time-bundled contracts perform meaningfully better among individuals with greater impatience over effort, suggesting that impatience is a contributing mechanism. In contrast, increasing the frequency of payment–which should be effective if individuals are impatient over payment rather than effort–has no effect, suggesting limited impatience over payments. Overall, the incentive program is effective, increasing daily steps by roughly 20 percent (13 minutes of brisk walking) and improving health.
Total citations
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