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

Andrej Woerner
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Andrej Woerner: LMU Munich

No 476, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

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 (search for similar items in EconPapers)
JEL-codes: C93 D47 D90 I12 (search for similar items in EconPapers)
Date: 2023-12-10
New Economics Papers: this item is included in nep-exp and nep-hea
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