Cash rewards beat refundable deposits in a 2,538-person smoking trial, because few took the deposit
In Halpern et al. (NEJM, 2015), 90.0% accepted a reward and 13.7% a deposit. Among those willing to take either, deposits did better. The arithmetic of who says yes.
In this article10 sections
Two programs for quitting smoking were offered to employees of CVS Caremark and to their relatives and friends: collect up to roughly $800 for staying off cigarettes, or first put down $150 of one’s own money and collect $650 in rewards on success. Cash rewards produced more quitters overall. Among the smokers who would have accepted either offer, though, the deposit produced more quitters than the reward did. Both statements come from the same trial (Halpern et al., New England Journal of Medicine, 2015, 372:2108-17, 2,538 participants), and the gap between them is entirely a story about who says yes.
The Halpern figures below come from the open-access full text on PubMed Central, read through a summarizing tool, so the supplementary tables were not seen. The gym study discussed later was read in full from the working paper.
What did the smoking trial compare?
Participants were randomly assigned to one of four incentive programs or to usual care, which meant informational resources and free cessation aids. Two programs targeted individuals and two targeted groups of six. In each pair, one paid a reward of about $800 and the other required a refundable $150 deposit, with $650 in reward payments for those who succeeded. The registry number is NCT01526265; funding came from the National Institutes of Health and CVS Caremark.
Why did the contract with the better results lose?
Of those assigned to reward programs, 90.0% accepted the assignment. Of those assigned to deposit programs, 13.7% did (P<0.001). Decliners stay in the arm chance assigned them to (intention-to-treat), so a deposit arm in which about six in seven never participated is mostly a usual-care arm with a small treated minority.
The intention-to-treat result followed. Sustained abstinence at 6 months was 15.7% in the reward programs and 10.2% in the deposit programs (P<0.001), against 6.0% under usual care, and the paper says the superiority of the reward programs was sustained through 12 months, when only the reward programs still beat usual care (the 12-month rates sit in tables not reviewed here). The conclusion in the abstract is plain: reward programs “were much more commonly accepted,” which led to higher abstinence.
Do deposits work better for the people who accept them?
The authors also ran an instrumental-variable analysis, a method that estimates the effect for the subgroup who would accept whichever program they were handed. That subgroup was estimated at 13.7% of participants. Among them, abstinence at 6 months was 13.2 percentage points higher with deposits than with rewards (95% confidence interval 3.1 to 22.8).
Three cautions apply. The subgroup is inferred statistically; no one was observed to be a “would accept either” person. The interval is wide, compatible with a gain of 3 points or of 23. And the deposit arm was not a pure loss contract, since successful participants also received $650. The supportable reading is narrow: among people willing to put $150 down, the commitment appears to have added something that a pure prize did not.
Did the same pattern appear in a company gym?
Royer, Stehr and Sydnor (American Economic Journal: Applied Economics, 2015; NBER working paper 18580, read in full) ran a field experiment at a company’s gym. Employees were paid for gym visits during a four-week incentive period, and a randomly chosen half of them were then offered a self-funded commitment contract: pledge not to go more than 14 calendar days in a row without a visit over eight weeks, with the money forfeited to the United Way on failure.
Take-up was 12% of those offered, and 22% among those who had visited the gym at least once during the incentive period. Incentives alone faded fast, with only 25% of the increase in exercise persisting in the first month after payment stopped. In the group offered the contract, about 30% attended at least weekly during months 2 and 3 against a 20% control rate, while the incentive-only group fell to just over 20%. The authors report effects detectable a year after the incentive ended. The 30% figure covers everyone offered the contract, so an offer accepted by a minority moved the group average.
One result complicates the picture of commitment as a remedy for the weak-willed. Demand was similar among employees already exercising regularly, with no apparent need. Whoever takes a contract is therefore not simply whoever needs one most.
What would deposit arms need in take-up to match rewards?
The following is this article’s arithmetic, not the authors’, and rests on stated assumptions. Take the trial’s reported numbers: usual care 6.0%, reward arm 15.7% with 90.0% acceptance. Assume decliners quit at the usual-care rate of 6.0%. Reward-arm acceptors then quit at (15.7 − 0.10 × 6.0) / 0.90 = 16.8%. Treat those as a rough proxy for the “would accept either” group and add the 13.2-point instrumental-variable difference: roughly 30.0% abstinence for deposit acceptors.
The deposit arm’s overall rate at take-up t is then 6.0 + 24.0 × t, in percent:
| Take-up of deposit | Overall 6-month abstinence |
|---|---|
| 13.7% (observed) | 9.3% (the trial observed 10.2%) |
| 25% | 12.0% |
| 40% | 15.6% |
| 50% | 18.0% |
| 90% | 27.6% |
Setting the formula equal to the reward arm’s 15.7% gives t = 9.7 / 24.0, about 40%. Under these assumptions, deposits would need roughly triple their take-up to tie rewards, and only if the newly persuaded responded as strongly as the self-selected 13.7%. That is the weak step: people who decline a deposit may do so because they doubt their own odds, so the 30% figure probably overstates what a reluctant majority would do.
What does this leave for an app that makes friends the consequence?
The take-up problem Halpern found applies to any commitment tool, including DontSnooze, which attaches a social consequence in front of friends and not a money deposit: the people who most need it may never install it, and nothing in this trial speaks to social stakes, since nobody there lost a photo or face. The case for using one anyway rests on the 13.7%: those willing to commit did better with a commitment than with a prize, and whether any given person belongs to that group is learned only by trying.
Three loose ends in the data
Did the deposit programs beat usual care?
Yes. In the intention-to-treat analysis every one of the four incentive programs had higher sustained abstinence at 6 months (range 9.4% to 16.0%) than usual care (6.0%), with P below 0.05 for each comparison. Group programs (groups of six) scored 13.7% abstinence against 12.1% for individual ones (P=0.29), so the social format added no detectable benefit.
Can the people who accept a deposit be identified in advance?
Halpern’s analysis estimates the outcome for the 13.7% who would accept either arm but cannot name them. In the gym study, women, middle-aged to older employees and overweight or obese employees were more likely to create a contract, and regular exercisers took one up at similar rates to everyone else.
Why is the 13.2-point estimate so uncertain?
Its 95% confidence interval (3.1 to 22.8) spans nearly 20 points because it rests on an inferred subgroup of about one participant in seven. The intention-to-treat gap between 15.7% and 10.2%, built from the full sample, is far tighter, which is why the two answers can look contradictory.
For a broader tour of field experiments that set money against social pressure, including Giné, Karlan and Zinman’s smoking accounts, see this review of money versus social stakes. The incentive half of the gym study has company in Charness and Gneezy’s 2009 paid-to-attend experiments, and whether staking money amounts to betting is taken up in a post on gambling and wake-up stakes.