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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.

Suggested Citation

  • Nicholas Burger & John Lynham, 2010. "Betting on weight loss … and losing: personal gambles as commitment mechanisms," Applied Economics Letters, Taylor & Francis Journals, vol. 17(12), pages 1161-1166.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:12:p:1161-1166
    DOI: 10.1080/00036840902845442
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    References listed on IDEAS

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    Cited by:

    1. John Cawley & Joshua A. Price, 2011. "Outcomes in a Program that Offers Financial Rewards for Weight Loss," NBER Chapters, in: Economic Aspects of Obesity, pages 91-126, National Bureau of Economic Research, Inc.
    2. Dolan, Paul & Rudisill, Caroline, 2014. "The effect of financial incentives on chlamydia testing rates: Evidence from a randomized experiment," Social Science & Medicine, Elsevier, vol. 105(C), pages 140-148.
    3. Dolan, P. & Hallsworth, M. & Halpern, D. & King, D. & Metcalfe, R. & Vlaev, I., 2012. "Influencing behaviour: The mindspace way," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 264-277.
    4. Georgia S. Papoutsi & Andreas C. Drichoutis & Rodolfo M. Nayga Jr., 2013. "The Causes Of Childhood Obesity: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 743-767, September.
    5. Anton Suvorov & Jeroen van de Ven, 2008. "Goal Setting as a Self-Regulation Mechanism," Working Papers w0122, Center for Economic and Financial Research (CEFIR).
    6. Anett John, 2020. "When Commitment Fails: Evidence from a Field Experiment," Management Science, INFORMS, vol. 66(2), pages 503-529, February.
    7. Andrej Woerner, 2023. "Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising," Rationality and Competition Discussion Paper Series 476, CRC TRR 190 Rationality and Competition.
    8. Cawley, John & Price, Joshua A., 2013. "A case study of a workplace wellness program that offers financial incentives for weight loss," Journal of Health Economics, Elsevier, vol. 32(5), pages 794-803.
    9. Ryota Nakamura & Marc Suhrcke & Daniel John Zizzo, 2017. "A triple test for behavioral economics models and public health policy," Theory and Decision, Springer, vol. 83(4), pages 513-533, December.
    10. 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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