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Betting on weight loss … and losing: personal gambles as commitment mechanisms

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  • Nicholas Burger
  • John Lynham

Abstract

Professional bookmakers rarely accept bets from individuals who directly control the outcome of the bet. We analyse a unique exception to this rule and a potential policy innovation in the battle against obesity: a weight loss betting market. If obese individuals have time-inconsistent preferences then commitment mechanisms, such as personal gambles, should help them restrain their short-term impulses and lose weight. Correspondence with the bettors confirms that this is their primary motivation. However, it appears that the bettors in our sample are not particularly skilled at choosing effective commitment mechanisms. Despite payoffs of as high as $7350, approximately 80% of people who spend money to bet on their own behaviour end up losing their bets. Empirical analysis of the betting market yields further insights. Males are treated very differently compared to females: being male is considered equivalent to having an extra 6 months to lose the same amount of weight. Movements in the market price also confirm the belief that rigidity is preferred to flexibility in setting successful weight loss targets.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/00036840902845442&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 17 (2010)
Issue (Month): 12 ()
Pages: 1161-1166

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Handle: RePEc:taf:apeclt:v:17:y:2010:i:12:p:1161-1166

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Cited by:
  1. John Cawley & Joshua A. Price, 2009. "Outcomes in a Program that Offers Financial Rewards for Weight Loss," NBER Working Papers 14987, National Bureau of Economic Research, Inc.
  2. Papoutsi, Georgia & Drichoutis, Andreas & Nayga, Rodolfo, 2011. "The causes of childhood obesity: A survey," MPRA Paper 30992, University Library of Munich, Germany.
  3. Anton Suvorov & Jeroen van de Ven, 2008. "Goal Setting as a Self-Regulation Mechanism," Working Papers w0122, Center for Economic and Financial Research (CEFIR).
  4. Burger, Nicholas & Charness, Gary & Lynham, John, 2011. "Field and online experiments on self-control," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 393-404, March.

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