My Experiment in Economic Incentives Begins Today

That is, my $1200 Weight-Loss Gamble.

I need to lose one percentage-point of body fat% (BF%) between the first week in March and the first week in April, or I will be forced to pay $300. For the first week in March my average body fat % was 20.79% so I need to be at less than 19.79% for the first week in April. If I fail, my fines will be paid out to the following:

• Médecins Sans Frontières as chosen by Felix Salmon.


• The booze, cigars and gasoline for Hummers fund as chosen by Cowen and Tabarrok of Marginal Revolution.


• To Be Determined as chosen by the Freakonomics Blog.

Some of the participants have already threatened to send me wheat-free goodies and candies (see: Eclectecon) so their chosen recipient has a better chance of collecting $100. I say: Bring it on! Feel free to send discouragement to me (red wine and chocolate are good choices) to my work address:

Mike Moffatt
c/o Nexreg Compliance
1673 Richmond St. - Suite 501
London, ON
N6G 2N3
CANADA

But you would be wasting your money if you do. Because I'm going to succeed.

I am treating this as a bit of an experiment in incentives, namely how to build good ones. The two comments I have gotten from friends when I tell them the details of the bet are:

• That is a lot of money for a bet!


• Your goals are fairly modest.

The two are obviously related. One good thing about a pay-for-failure plan such as this one is that it forces you to make realistic goals. I suspect one of the reasons why so many of us fail to achieve what we set out to do is that we set the bar too high, fail miserably, and give up after a couple of attempts. Naturally I am hoping this does not happen here.

To learn more about why I believe in these kinds of plans, see: How Economics Can Help You Keep Your New Year's Resolutions.