Working Papers,
Lund University, Department of Economics

Abstract: This paper investigates the use of self-funded commitment contracts to support individuals in achieving their goals of increased physical activity. We compare the effect of soft (non-incentivised) commitment contracts with hard (incentivised) contracts using a randomised experiment with 1629 members of a large gym in Stockholm, Sweden. We find a significant positive impact of being offered a hard contract on monthly visits to the gym and the probability of meeting one's contract goal. Hard and soft commitment contracts increase gym visits by 21% and 8%, respectively, relative to the control group. Trait self-control is negatively associated with the likelihood of accepting a contract and accepting to add stakes. The effect of soft and hard commitment contracts does not, however, differ by trait self-control. Importantly, we find that the effects of both hard and soft contracts were greatest among participants who reported exercising the least at baseline. Our experiment explores the use of a completely self-funded and highly scalable intervention. Our experimental design allows us to shed light on the importance of hard penalties in designing commitment contracts.

Keywords: Incentives; Commitment contract; Self-control; Gym attendance

JEL-codes: C93; D03; I12

Language: English

82 pages, April 11, 2023

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