Incentivizing Behavioral Change: The Role of Time Preferences

79 Pages Posted: 20 May 2020

See all articles by Shilpa Aggarwal

Shilpa Aggarwal

Indian School of Business (ISB), Hyderabad

Rebecca Dizon-Ross

University of Chicago

Ariel Zucker

University of California, Berkeley

Multiple version iconThere are 2 versions of this paper

Date Written: May 2020

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 incentives 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.

Suggested Citation

Aggarwal, Shilpa and Dizon‐Ross, Rebecca and Zucker, Ariel, Incentivizing Behavioral Change: The Role of Time Preferences (May 2020). CEPR Discussion Paper No. DP14751, Available at SSRN: https://ssrn.com/abstract=3603983

Shilpa Aggarwal (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Rebecca Dizon‐Ross

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Ariel Zucker

University of California, Berkeley

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
23
PlumX Metrics