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36 - Incentive-Based Interventions

from Part III - Behavior Change Interventions: Practical Guides to Behavior Change

Published online by Cambridge University Press:  04 July 2020

By
Uri Gneezy ,
Agne Kajackaite  and
Stephan Meier
Edited by
Martin S. Hagger ,
Linda D. Cameron ,
Kyra Hamilton ,
Nelli Hankonen  and
Taru Lintunen
Martin S. Hagger
Affiliation:
University of California, Merced
Linda D. Cameron
Affiliation:
University of California, Merced
Kyra Hamilton
Affiliation:
Griffith University
Nelli Hankonen
Affiliation:
University of Helsinki
Taru Lintunen
Affiliation:
University of Jyväskylä
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Summary

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.

Keywords

tangible rewardsintangible rewardsneoclassical economic theorycreating habitsbreaking habitsregular and upfront incentivesremoving barriersbehavior stockpresent biasreducing switching costs
Type
Chapter
Information
The Handbook of Behavior Change , pp. 523 - 536
Publisher: Cambridge University Press
Print publication year: 2020

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References

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