Annals of Health Law
STRATEGY AGAINST SMOKING
rewards is expected to have on behavior170 as well as the emotional
attraction to small probabilities of large rewards. 171 According to certain
studies, deposit contracts might even provide a slightly more effective
incentive. 172 However, obligating people to invest their own capital with
the risk of losing it in case of smoking would entail serious legal concerns,
most notably with regard to property rights. With an optional participation,
it seems likely that people of low socioeconomic status particularly will not
be willing to invest their capital in the program simply due to the lack of
disposable funds. In general, the number of participants would likely be
much lower. By supplying participants with an increasing credit balance,
the suggested model at least contains an additional mechanism that is meant
to resemble the concept of deposit contracts.
The decision to provide the participants with rewards in the form of
money or goods was chosen over reductions of healthcare premiums or
other forms of discounts because of the mental accounting phenomenon, 173
which states that people tend to attach greater value to rewards than to
discounts. Allowing participants to choose their own two-digit number is
based on the widespread overconfidence174 with regard to the impact of
one’s own decisions on future events. It is assumed that the participants
will attribute a greater chance of success in the lottery due to their selection
of the number. This would amplify the expected inaccurate probability
weighting and thereby influence participants to subconsciously attach an
even higher value to the potential rewards. Thus, the freedom of choice
shall contribute to a more efficient allocation of resources.
By offering a comparatively high chance – roughly one in five – to win a
small amount every week, the model attempts to appeal to the present bias,
which leads to a significantly greater incentive to behave in a certain way if
immediate gratifications are offered. Due to the immediate feedback, even
small rewards are assumed to have a substantial impact175 contributing to an
170. Colin Camerer & Teck-Hua Ho, Experience-Weighted Attraction: Learning in
Normal Form Games, 67 ECONOMETRICA 827, 836-74 (1999).
171. George F. Loewenstein et al., Risk as Feelings, 127 PSYCHOL BULL. 267, 276-278
(2001); Drazen Prelec, The Probability Weighting Function, 66 ECONOMETRICA 497 passim
172. Kevin G. Volpp et al., Financial Incentive-Based Approaches for Weight Loss – A
Randomized Trial, 300 J. AM. MED. ASS’N 2631 passim (2008); see Leslie K. John et al.,
Financial Incentives for Extended Weight Loss: A Randomized, Controlled Trial, 26 J. GEN.
INTERNAL MED. 621 passim (2011); see also IAN AYRES, CARROTS AND STICKS: UNLOCK THE
POWER OF INCENTIVES TO GET THINGS DONE passim (Bantam, 2010) (strongly supporting
deposit contracts in general).
173. See supra Part II. C. 1.e.
174. See supra Part II. C. 1.c.
175. Cf. Ainslie, supra note 101, passim; Loewenstein, supra note 101, passim; Richard
H. Thaler, Some Empirical Evidence on Dynamic Inconsistency, 23 ECON. STUD. 201 passim