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We have seen that Behavioral Economics allows policy makers to design interventions to more effectively achieve policy goals. We know that not all incentives are created equal. Individuals overweight small probability events and feel losses more severely than equivalent gains. A reward incentive that leverages these biases might be more effective for the same expected value. Moreover, in certain domains individuals respond in perverse ways to incentives. In some settings, monetary incentives lead individuals to respond with less effort rather than more.
In the following video Prof. Kevin Volpp summarizes some of his studies using behavioral insights to promote healthy habits. Note this is also a useful recap of what we have seen.
Most employers now have incentive programs designed to nudge workers toward healthier choices. But according to Prof. David Asch most of those programs are not designed properly to deal with the human element.
Please connect to my Zoom (link in Absalon) on Wednesday, October 23 at 13:15.
Group 2 summarizes the three papers you have to read for today. Remeber you have to read all the papers before the lecture and prepare your questions for the group.
I expect an active discussion about each paper: ask all the questions you have (concepts, method, analysis, etc.) and disccuss the implications of these papers.
Lizzie will discuss “A randomized controlled trial of financial incentives for weight loss” focusing on the specific concepts behind the interventions, before discussing the results. We will focus on Table 2 and Figure 2 and then have a class discussion about the utility of the findings, and the potential limitations.
Mathilde will present “Put Your Money Where Your Butt Is: A Commitment Contract for Smoking Cessation”. In this paper we will focus on treatment of the CARES product and the method used to evaluate the effect of the treatment. We will briefly go through the experimental design and in this regard present Table 1 and 4. Afterwards we will explain how the intention-to-treat (ITT) is estimated and present results by presenting Table 5. At last we are going to talk about possible critiques of the study related to attrition bias, selection bias, external validity open a discussion of what other behavioural biases that might cause that people don’t respond rationally economic incentives.
Diana will present the paper “Incentives to exercise”. In this paper we will focus on the motivation, the research strategy and the results. To support this we will use Figure 1, Figure 2, Table 1 and Table 3.
For helping you summarize the material I link a short summary for paper 2 (here).
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