Should Individuals Choose their Own Incentives? Evidence from a Mindfulness Meditation Intervention

Andrej Woerner, Giorgia Romagnoli, Birgit M. Probst, Nina Bartmann, Jonathan N. Cloughesy and Jan Willem Lindemans
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Andrej Woerner: LMU Munich
Giorgia Romagnoli: University of Amsterdam – CREED
Birgit M. Probst: TU Munich
Nina Bartmann: Duke University
Jonathan N. Cloughesy: Duke University & University of Southern California
Jan Willem Lindemans: Duke University

No 475, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Traditionally, incentives to promote behavioral change are assigned rather than chosen. In this paper, we theoretically and empirically investigate the alternative approach of letting people choose their own incentives from a menu of increasingly challenging and rewarding options. When individuals are heterogeneous and have private information about their costs and benefits, we theoretically show that leaving them the choice of incentives can improve both adherence and welfare. We test the theoretical predictions in a field experiment based on daily meditation sessions. We randomly assign some participants to one of two incentive schemes and allow others to choose between the two schemes. As predicted, participants sort into schemes in (partial) agreement with the objectives of the policy maker. However, in contrast to our prediction, participants who could choose complete significantly fewer sessions than participants that were randomly assigned. Since the results are not driven by poor selection, we infer that letting people choose between incentive schemes may bring in psychological effects that discourage adherence.

Keywords: monetary incentives; dynamic incentives; field experiment; mental health (search for similar items in EconPapers)
JEL-codes: D03 (search for similar items in EconPapers)
Date: 2023-12-08
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hea and nep-hrm
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