Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising

63 Pages Posted: 14 Jan 2022

See all articles by Andrej Woerner

Andrej Woerner

Ludwig Maximilian University of Munich (LMU)

Date Written: 2021

Abstract

This paper introduces the matched-bet mechanism. The matched bet is an easily applicable and strictly budget-balanced mechanism that aims to help people overcome time-inconsistent behavior. I show theoretically that offering a matched bet helps both sophisticated and naive procrastinators to reduce time-inconsistent behavior. A field experiment on exercising confirms the theoretical predictions: offering a matched bet has a significant positive effect on gym attendance. Self-reported procrastinators are significantly more likely to take up the matched bet. Overall, the matched bet proves a promising device to help people not to procrastinate.

Keywords: monetary incentives, market design, field experiment, health behavior

JEL Classification: C930, D470, F900, I120

Suggested Citation

Woerner, Andrej, Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising (2021). CESifo Working Paper No. 9503, Available at SSRN: https://ssrn.com/abstract=4007785 or http://dx.doi.org/10.2139/ssrn.4007785

Andrej Woerner (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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