Chapter 9 280 control.22-24 Some studies also present evidence suggesting that loss incentives are more effective than incentives based on gains,18, 25 although other studies find no evidence for differences in effectiveness,26, 27 or evidence in the opposite direction.21 Interpreting the existing literature is complicated by the various operationalisations of loss incentives. A common strategy used to operationalise incentives involving losses is to ask respondents to commit some of their own money into a deposit contract, to which some amount is added as an incentive. The total deposit is only returned to respondents after they attain an agreedupon goal. Such matched deposit contracts have been used by e.g. John et al.28 Other authors,22, 24 on the other hand, used completely self-funded deposit contracts, i.e., respondents put their own money at stake without matching. Note that for simplicity, we will refer to all incentives in which respondents risk losing some amount of their own money as deposit-based incentives. In addition to the incentive scheme, an additional choice to be made is the mode of assignment of financial incentives. That is, should individuals be free to choose their incentive scheme, or can it be beneficial to provide incentives without individuals being consulted on their preferences beforehand? This is an important question, as the effectiveness of some types of incentive schemes may seem promising, but it appears voluntary take-up is low. For example, stated preference studies typically find large hypothetical take-up of depositbased incentives,29-31 in practice far fewer people are willing to actually deposit their own money,21 especially when deposits are completely self-funded,22, 24, 32 as summarized in Carrera et al.33 Encouraging respondents to take up deposit contracts may require deposits to be small and/or opt-out designs, as shown by Erev et al.25 Although offering individuals a choice of incentive schemes may potentially increase the effectiveness of incentives due to increased autonomy,29, 34-36 take-up of commitment devices such as deposit-based incentives is typically considered dependent on individuals’ being sophisticated about their preferences.16 As such, as also explored by Halpern et al.21 and Adjerid et al.,29 deposit-based incentives may seem more effective than incentives based on gains, but perhaps this is driven primarily by the self-selection of particularly eager respondents into deposit-based incentive. As such, there may be a benefit of exogenously assigning or nudging less eager individuals towards supposedly beneficial incentive schemes.29 However, so far only a handful of studies have investigated variation in effectiveness of incentive schemes according to their mode of assignment,29, 34, 35, 37 with conflicting evidence.
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