Deposit? Yes, please! The effect of different modes of assigning reward-and deposit-based financial incentives on effort 279 9 Introduction Motivation is a key component for engaging in behaviour and behaviour change with a significant impact on health or wellbeing, e.g., smoking cessation or physical exercise. Often these behaviours involve costs and/or effort in the short term with potential benefits only occurring later. Some individuals may complete these tasks exclusively on basis of their intrinsic motivation (our natural tendency to seek challenge, novelty and learning opportunities), while for others extrinsic motivation is also needed.1 One potential strategy to increase motivation is the use of financial incentives. Some worry that this strategy would reduce intrinsic motivation,2-4 as incentives would reduce the need for intrinsic motivation and their presence may signal the incentivized behaviour is unattractive.5 Yet, the use of financial incentives for promoting behaviour change is widespread. For example, financial incentives have been found to be an effective tool to increase motivation for health behaviour change, at least in the short term for systematic reviews, see:6, 7-10 Interestingly, recent evidence suggests that (at least in the context of vaccination), incentives are unlikely to harm intrinsic motivation or have other unintended negative consequences.11 In practice, many different incentive schemes can be used. Adams et al.12 distinguish between incentives based on (inter alia) the size, timing and direction of payment. Perhaps obviously, the size of a financial reward is of importance. Generally it is assumed that higher rewards yield stronger motivation, although evidence suggests there are diminishing returns to increasing incentive size.13, 14 The timing of payments should also be carefully considered. A large body of economics literature suggests that future rewards are discounted,15 and that many individuals overweigh any cost or benefit experienced today.16 Hence, postponing payments into the future (heavily) decreases their value today. Finally, the direction of financial incentives is important, defined by Adams et al.12 as the “sign” of the incentive used: is the incentive perceived as a reward to be gained through performing a task or as a loss (e.g., a fine) imposed when tasks are not completed? The difference between gain and loss incentives is crucial when individuals display loss aversion, i.e., the tendency that losses receive more weight than gains of the same size.17 Earlier work has used and/or compared financial incentives for behaviour change with different sizes, timing and direction.18, 19-21 Several studies show that incentives involving losses are effective compared to a no incentive
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