Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising

This paper introduces the matched-bet mechanism. The matched bet is an easily applicable and strictly budget-balanced mechanism that aims to help people overcome time-inconsistent behavior. I show theoretically that offering a matched bet helps both sophisticated and naive procrastinators reduce time-inconsistent behavior. I conduct a field experiment to test the matched-bet mechanism in a natural area of application: exercising. My experimental results confirm the theoretical predictions: offering a matched bet has a significant positive effect on gym attendance. Self-reported procrastinators are significantly more likely to take up the matched bet. Overall, the matched bet proves a promising device to help people exercise more. I discuss how a matched bet could also be implemented in other areas such as academic performance, weight loss and smoking cessation.