Designing Incentives for Impatient People: An RCT Promoting Exercise to Manage Diabetes

Abstract

Many people are impatient. We introduce domain-specific discounting to a contracting model and test a strategy for improving incentives when people are impatient over effort: implement time-bundled contracts that make the payment for future effort increase in current effort. Using a randomized evaluation of an exercise incentive program among diabetics in India, we find that time-bundled contracts generate equivalent effort to time-separable contracts at 15 percent lower cost. Moreover, they perform 30 percent better among individuals with above-median effort impatience. Pooled across contracts, incentives increase steps by 20 percent and improve blood sugar relative to a control group. (JEL D86, D91, I12, I18, O12)