Some of us have too many bad habits, such as smoking, Some of us have too many bad habits, such as smoking,

and too few good ones, such as exercisingand too few good ones, such as exercising

Could incentives be used to “improve” peoples’ habit Could incentives be used to “improve” peoples’ habit formation—reducing the bad ones and increasing the formation—reducing the bad ones and increasing the good ones?good ones?

““Behavioral Interventions”Behavioral Interventions”

I will present some success in increasing positive habitsI will present some success in increasing positive habits—and a challenge of reducing bad habits. —and a challenge of reducing bad habits.

Incentives and HabitsIncentives and Habits

Part 1: reinforcing good habits, with Gary Part 1: reinforcing good habits, with Gary Charness (UCSB)Charness (UCSB)

People don’t exercise enough - bad for health People don’t exercise enough - bad for health and obesityand obesity

Can we use incentives to make people go more Can we use incentives to make people go more frequently to the gym? frequently to the gym? – In the short run (when the incentives are present)In the short run (when the incentives are present)

– In the long run (after the incentives are removed)In the long run (after the incentives are removed)

120 students - 40 in each of 3 treatments120 students - 40 in each of 3 treatments Participants were invited to an experimental labParticipants were invited to an experimental lab Read a short article describing the importance of Read a short article describing the importance of

exercising and answered some questionsexercising and answered some questions They were invited to come back to the lab one They were invited to come back to the lab one

week later to answer some more questionsweek later to answer some more questions Each received $25 for the two times they came to Each received $25 for the two times they came to

the labthe lab

For the control group, that was all we didFor the control group, that was all we did

In the other two groups, we told participants In the other two groups, we told participants that they must go to the gym at least once that they must go to the gym at least once during the week during the week

We got the data about the visits from the gym We got the data about the visits from the gym (computerized)(computerized)

Upon arriving back to the lab in the second Upon arriving back to the lab in the second week, people were randomly assigned to one of week, people were randomly assigned to one of two groupstwo groups– Incentives for one weekIncentives for one week

– Incentives for five weeksIncentives for five weeks

For the one week group - that was the end of For the one week group - that was the end of the studythe study

For the four weeks group - we offered extra For the four weeks group - we offered extra $100 to go to the gym at least 8 times during $100 to go to the gym at least 8 times during the following 4 weeksthe following 4 weeks

To sum—three treatments:To sum—three treatments:– No incentivesNo incentives

– Incentives for one weekIncentives for one week

– Incentives for one + four weeksIncentives for one + four weeks

Two competing hypothesesTwo competing hypotheses

First hypothesis: Crowding outFirst hypothesis: Crowding out Empirical findings suggest that sometimes paying Empirical findings suggest that sometimes paying

people to do an activity mightpeople to do an activity might – help in the short run (while the incentives are present)help in the short run (while the incentives are present)

– but be detrimental in the long run - once the incentives are but be detrimental in the long run - once the incentives are removedremoved

People who receive $100 to go to the gym 8 times People who receive $100 to go to the gym 8 times might go more frequently while the incentives are might go more frequently while the incentives are present, but once the incentives are removed will go present, but once the incentives are removed will go less frequently than the control groupless frequently than the control group

Second hypothesis: habit formationSecond hypothesis: habit formation

Becker and MurphyBecker and Murphy

– marginal utility today is positively correlated with marginal utility today is positively correlated with

historical consumptionhistorical consumption

– changes today can have small effect in the short changes today can have small effect in the short

run but increasingly large effects in the long runrun but increasingly large effects in the long run

By paying people to go to the gym for few By paying people to go to the gym for few

weeks we increase the marginal utility of future weeks we increase the marginal utility of future

visits visits

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Figure 1 - Average # of Visits, Before & After

ControlEncouragePay $100

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Figure 2 - Change in # of visits, by individual

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Implications - e.g., educationImplications - e.g., education

Should we pay kids for success in exams? Should we pay kids for success in exams?

Some recent findings show that paying students Some recent findings show that paying students

help in the short run (when the incentives are help in the short run (when the incentives are

present)present)

But what are the long run influences of this But what are the long run influences of this

– Destroy intrinsic motivation?Destroy intrinsic motivation?

– ““I learn because I’m paid and not because it is I learn because I’m paid and not because it is

important/fun/…?”important/fun/…?”

Bad habits, with Harriet de Wit (Chicago)Bad habits, with Harriet de Wit (Chicago) Cigarette smoking is a major health problemCigarette smoking is a major health problem Over the years, researchers have used different Over the years, researchers have used different

methods to encourage and motivate abstinencemethods to encourage and motivate abstinence Examples include:Examples include:

– individual and group counselingindividual and group counseling

– pharmacological interventionspharmacological interventions

– inpatient and outpatient treatmentsinpatient and outpatient treatments

– support groupssupport groups

– workplace interventions workplace interventions

– family therapies family therapies

Many used rewards and punishment to influence Many used rewards and punishment to influence

voluntary behavioral adaptationsvoluntary behavioral adaptations

Assume: Smoking behavior could be changed using Assume: Smoking behavior could be changed using

extrinsic incentivesextrinsic incentives

The background theory--operant conditioning (Skinner, The background theory--operant conditioning (Skinner,

1938, 1972)1938, 1972)

The idea is that behavior is learned and reinforced by The idea is that behavior is learned and reinforced by

interaction with environmental contingenciesinteraction with environmental contingencies

Because behavior is controlled by its consequences, it can Because behavior is controlled by its consequences, it can

be changed by changing its consequences be changed by changing its consequences

First step: show that people behave differently First step: show that people behave differently

than starved pigeonsthan starved pigeons

In the first study we plan to extend the findings In the first study we plan to extend the findings

of Gneezy and Rustichini (2000) to the study of of Gneezy and Rustichini (2000) to the study of

reinforcement of smoking abstinence using reinforcement of smoking abstinence using

monetary incentivesmonetary incentives

Show(?) that monetary incentives contingent on Show(?) that monetary incentives contingent on

smoking cessation may actually interfere with smoking cessation may actually interfere with

future attempts to abstainfuture attempts to abstain

The studyThe study

Recruit cigarette smokers who are not currently Recruit cigarette smokers who are not currently

planning to quitplanning to quit

Three treatments consisting of two parts, each part Three treatments consisting of two parts, each part

consists of three daysconsists of three days

All participants receive monetary compensation for All participants receive monetary compensation for

participatingparticipating

They are all asked and encouraged to abstain from They are all asked and encouraged to abstain from

smoking during the two parts of the studysmoking during the two parts of the study

Part 1 (three days)Part 1 (three days)

Treatment 1: Participants will not receive Treatment 1: Participants will not receive additional contingent monetary incentivesadditional contingent monetary incentives

Treatment 2: Participants will be paid a small Treatment 2: Participants will be paid a small ($1) compensation for every day in which they ($1) compensation for every day in which they will not smoke.will not smoke.

Treatment 3: Same as treatment 2, but with a Treatment 3: Same as treatment 2, but with a large monetary compensation ($20)large monetary compensation ($20)

Part 2 (three days)Part 2 (three days)

This part will take place four days after the This part will take place four days after the end of part 1end of part 1

In this part, all participants will be asked and In this part, all participants will be asked and encouraged not to smoke encouraged not to smoke

No additional incentives will be usedNo additional incentives will be used

Predictions - Part 1:Predictions - Part 1:

WWe predict that in part 1, treatment 3 will be the e predict that in part 1, treatment 3 will be the most successful in terms of participants not most successful in terms of participants not smokingsmoking

In contrast with Skinner’s operant conditioning In contrast with Skinner’s operant conditioning model, we predict that treatment 1 will be more model, we predict that treatment 1 will be more successful than treatment 2. successful than treatment 2.

Predictions – part 2: Predictions – part 2:

We predict that treatment 1 will be more effective than We predict that treatment 1 will be more effective than the other two treatmentsthe other two treatments

The reason is that participants, who were paid before, The reason is that participants, who were paid before, will not refrain from smoking when this is not will not refrain from smoking when this is not extrinsically rewarded extrinsically rewarded

Note that this is of great relevance to the debate Note that this is of great relevance to the debate regarding the long term effect of incentives on smokingregarding the long term effect of incentives on smoking

Even incentive programs that are successful while the Even incentive programs that are successful while the incentives are present might be counterproductive once incentives are present might be counterproductive once the incentives are removedthe incentives are removed