Financial incentives have been shown to
promote a variety of health behaviors. For example, in a randomized, clinical
trial involving 878 General Electric employees, a bundle of incentives worth
$750 for smoking cessation nearly tripled quit rates, from 5.0% to 14.7%,8 and
led to a program adapted by General Electric for its U.S. employees.9 Although
incentive programs are increasingly used by governments, employers, and
insurers to motivate changes in health behavior,10,11 their design is usually
based on the traditional economic assumption that the size of the incentive
determines its effectiveness. In contrast, behavioral economic theory suggests
that incentives of similar size may have very different effects depending on
how they are designed
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