Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company

Abstract

Financial incentives have been shown to have strong positive short run effects for problematic health behaviors, but the effects often disappear once incentive programs end. This paper analyzes the results of a large scale workplace field experiment to examine whether self funded commitment contracts improve the long run effects of incentive programs. Consistent with existing findings, workers responded strongly to an incentive targeting use of the company gym, but long run effects were modest, at best. However, workers in the treatment arm that combined the incentive program with a commitment contract option showed long lasting behavioral changes, persisting even 1 year after the incentive ended.