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Naivete, projection bias, and habit formation in gym attendance

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  • Acland, Dan
  • Levy, Matthew

Abstract

We develop a model capturing habit formation, projection bias, and present bias in an intertemporal-choice setting, and conduct a field experiment to identify its main parameters. We elicit subjects' pre- and post-treatment predictions of post-treatment gym attendance, using a habit-formation intervention based on Charness and Gneezy (2009) as an exogenous shock to treated subjects' gym preferences. Projection-biased subjects, projecting their current habit state onto their future expectations, will, ex-ante, under-estimate any habit-formation effect of our treatment. Naive present-biased subjects in both groups will overestimate their future attendance. Like Charness and Gneezy, we find subjects do form a significant short-run habit, though we find substantial decay caused by the semester break. Subjects appear not to embed this habit formation into their ex-ante predictions. Approximately one-third of subjects formed a habit equivalent to the effect of a $2.60 per-visit subsidy, while their predictions correspond to 90% projection bias over this habit formation. Moreover, subjects greatly over-predict future attendance, which we interpret as evidence of partial naivete with respect to present bias: they appear to expect their future selves to be two-thirds less "present biased" than they currently are.

Suggested Citation

  • Acland, Dan & Levy, Matthew, 2013. "Naivete, projection bias, and habit formation in gym attendance," LSE Research Online Documents on Economics 46827, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:46827
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    File URL: http://eprints.lse.ac.uk/46827/
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    References listed on IDEAS

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    1. George Loewenstein & Ted O'Donoghue & Matthew Rabin, 2003. "Projection Bias in Predicting Future Utility," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1209-1248.
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    6. Roland Bénabou & Jean Tirole, 2002. "Self-Confidence and Personal Motivation," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 871-915.
    7. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, May.
    8. S. Nageeb Ali, 2011. "Learning Self-Control," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 857-893.
    9. Michael Conlin & Ted O'Donoghue & Timothy J. Vogelsang, 2007. "Projection Bias in Catalog Orders," American Economic Review, American Economic Association, vol. 97(4), pages 1217-1249, September.
    10. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    11. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
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    Cited by:

    1. Garon, Jean-Denis & Masse, Alix & Michaud, Pierre-Carl, 2015. "Health club attendance, expectations and self-control," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 364-374.
    2. Augurzky, Boris & Bauer, Thomas K. & Reichert, Arndt R. & Schmidt, Christoph M. & Tauchmann, Harald, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 530, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Keith M. Marzilli Ericson, 2014. "On the Interaction of Memory and Procrastination: Implications for Reminders," NBER Working Papers 20381, National Bureau of Economic Research, Inc.
    4. Maria Anauati & Sebastian Galiani & Federico Weinschelbaum, 2015. "The rise of noncommunicable diseases in Latin America and the Caribbean: challenges for public health policies," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-56, December.
    5. Belot, Michele & James, Jonathan & Nolen, Patrick, 2014. "Incentives and Children's Dietary Choices:A Field Experiment in Primary Schools," Department of Economics Working Papers 41226, University of Bath, Department of Economics.
    6. repec:zbw:rwirep:0530 is not listed on IDEAS
    7. Andres Silva & Lindsey M. Higgins & Micaela M. Kulesz, 2016. "Nutritional Impact of Child-Directed TV Food Advertising Regulation: Are We Rearranging the Deck Chairs on the Titanic?," Journal of the Association for Consumer Research, University of Chicago Press, vol. 1(3), pages 422-444.
    8. Boris Augurzky & Thomas K.Bauer & Arndt R. Reichert & Christoph M. Schmidt & Harald Tauchmann, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 0530, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General

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