Incentive-Based Interventions

This chapter discusses how and why incentives affect behavior change. Incentives are often introduced into situations in which people are already motivated to change their behaviors but have trouble following through with their intentions. Our framework lays out four “channels” through which incentives can support behavior change: Incentives can create desired or break undesired habits and lead to long-term change even after they have been removed. Well-structured upfront and regular incentives can overcome the dilemma people face when benefits of an activity are too far in the future but costs are immediate, making implementation of behavior change difficult. Incentives can also help overcome setup and switching costs that serve as barriers to behavior change. The four channels and the supporting empirical evidence have implications for how incentive-based interventions work and provide guidance on how best to design them for increased efficacy.