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Incentive-Based Interventions
[collection article]
Abstract This chapter provides a framework for how incentives affect behavior change. Economic theory is built on the premise that incentives matter, but empirical evidence shows the effect of incentives on behavior is more complicated than predicted by the basic law of demand. Our framework highlights four ... view more
This chapter provides a framework for how incentives affect behavior change. Economic theory is built on the premise that incentives matter, but empirical evidence shows the effect of incentives on behavior is more complicated than predicted by the basic law of demand. Our framework highlights four potential "channels" through which incentives can affect behavior change: First, incentives can help create "desirable" or "adaptive" habits by building up the stock of behavior. Increasing recent experience makes current behavior less costly and more enjoyable. Second, incentives can help "kill" undesirable or maladaptive habits by reducing the stock of behavior. Decreasing recent experience makes current behavior costlier and less enjoyable. Third, incentives can help counter present bias. Using frequent and regular incentives helps change behavior. Fourth, incentives can help remove barriers to change. Using incentives to reduce switching costs makes uptake of the desired behavior or activity cheaper or even free. These four channels and the supporting empirical evidence for them have implications for how incentive-based interventions work and provide guidance on how best to design them for optimal efficacy.... view less
Keywords
behavior modification; incentive system; cost-benefit analysis; demand
Classification
Applied Psychology
Free Keywords
behavior stock; breaking habits; creating habits; intangible rewards; neoclassical economic theory; present bias; reducing switching costs; regular and upfront incentives; removing barriers; tangible rewards
Collection Title
The Handbook of Behavior Change
Editor
Hagger, Martin S.; Cameron, Linda D.; Hamilton, Kyra; Hankonen, Nelli; Lintunen, Taru
Document language
English
Publication Year
2020
Publisher
Cambridge University Press
City
New York, NY
Page/Pages
p. 523-536
Handle
http://hdl.handle.net/10419/237054
ISBN
978-1-108-67731-8
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications