Weight Loss and Incentives

by on August 9, 2010 at 7:30 am in Economics, Food and Drink | Permalink

Ted Frank reports on his 60k weight-loss bet with Ray Lehmann:

In late 2008, Ray Lehmann and I made an audacious bet: we would put up $60,000 that we would lose 60 pounds in nine months, and pay each other $1,000 for each pound the other lost. 

…I lost 32 pounds, Ray lost 41, and we were on pace to lose 60 each. StickK.com was offering to make us their official spokespeople.

Then things fell apart. We couldn't negotiate an appropriate contract with StickK, which wanted exclusive rights to our story without any compensation. The delay caused us to stop writing about the diet while we had false dreams of fame and glory from StickK promotion, and then we both got distracted with starting new jobs and the disappointment of shattered expectations when StickK stopped returning our calls.

Alex Tabarrok correctly predicted that the danger of the two-person bet was that we would collude not to enforce it.

And, indeed that was what happened. We started gaining weight, and started pushing back the goal-line for the end of the bet…neither of us held the other's feet to the fire….

Professor Tabarrok's solution was to create a third-party Leviathan to enforce the bet: he facetiously offered to pay us $500 to be the collector [not facetious, Ted!, AT]. Of course, that was a negative-expectation transaction for each of us, unless we thought we had a 90%+ chance of succeeding…Even the threat of public humiliation on Marginal Revolution wasn't enough to stop us from colluding.

But Ted isn't giving up.  He is looking for other people to take the bet to reduce the possibility of collusion or he would like to auction off leviathan rights.

Are there three other people out there willing to wager that they can lose 50 pounds over a reasonable amount of time? (Forty? Sixty?) Who's in, and under what conditions?

…In the alternative, how much is someone willing to pay to be Leviathan and have the opportunity to collect tens of thousands of dollars from me or Ray for failing to lose weight? I suppose I could put Leviathan rights up on eBay; if Marginal Revolution and a few other blogs publicized it, we could reach a good solid equilibrium price. What do people think?

I see this is as a good case study in the difficult of setting up an appropriate incentive scheme and also the difficulty of losing weight. When I put on my Tyler hat, however, I have to wonder whether all this effort put into clever incentive schemes is not a way of avoiding the real issues.  "Less blogging, more jogging," my friends.

What Ted and Ray are trying to do is to sail between Scylla and Charybdis by offsetting the pull of food with the pull of lost money. Carrot cake versus stick. But in this tug of war, how long will the balance last? How permanent will the weight loss be?

The real trick in weight loss, as in other areas of life, is to change wants not oppose them. Unfortunately, Seth Roberts nothwithstanding, this is a struggle with no easy solutions.

Nevertheless, I have proudly helped others to lose weight with unusual incentives, and my $500 bid for leviathan rights over Ted and Ray still stands. Good luck guys.

Meg August 9, 2010 at 8:05 am

My fundamental belief is that the only incentive that truly precipitates long-term weight loss is physical comfort and energy. When relating to something as low on the hierarchy of needs as “eating” and dealing with the endocrine response to hunger, there isn’t any evidence that offering to pay people leads to long-term reductions in heart disease or cancer, whereas increased physical strength and enjoyment of exercise appears to.

Of course, there is also the question of why I would care if these two guys lost 60 lbs. After all, clearly they are much happier being overweight if the promise of $1,000 isn’t swaying them; shouldn’t we respect that choice?

Bill August 9, 2010 at 8:48 am

I did some major antitrust work for a nationally known HMO. Their CEO, who was moderately overweight, and thus not a good spokesman for weightloss, had a bonus incentive in his contract if he lost 20-30 pounds. Thereafter, every meeting at the client had water, instead of softdrink, there were no bagels and cream cheese, but rather fruit plates, and the cafeteria menu was changed.

Everyone on the executive staff lost weight.

Except the CEO. He did lose a little, but not enough to qualify for the incentive award.

My thoughts were that the culture affected weight loss and gain of the group, and that monetary incentives don’t matter when you make a lot of gittas already.

mrwiizrd August 9, 2010 at 11:30 am
tgrass August 9, 2010 at 11:47 am

For once I’d agree with what I believe Hanson would say: the only long-term effective incentive for weight loss would be sexual.

After 30, keeping my gut off has been incentivized by thinning hair and a faith that I can still get a 25 year old girl to smile at me.

Joshua Holmes August 9, 2010 at 12:21 pm

The best way to lose weight and keep it off is to develop a deep disgust for fat people. It is a sorry and mean way to go through life, but it will motivate you like nothing else.

Six Ounces August 9, 2010 at 1:54 pm

I get the whole economic incentive bit. If this tale is true it’s disturbing.

Fitness isn’t about losing weight. It’s about changing your body composition and your lifestyle. Muscle weighs more than fat in equal volumes, so those who begin a healthier lifestyle often experience a disspiriting weight gain before it begins to decline. Abdominal fat, for men, is often the last to go and it’s difficult to see concrete results in the short run. Having a race to the bottom promotes dangerous malnutrition.

One a desired body composition is reached, the battle isn’t over. By that time your whole life should be transformed into permanently healthy nutrition and exercise.

Health is its own reward and a well-educated, intelligent economist should already know the costs and risks of being overweight. Why should a bet or competition be necessary? If you lack the willpower to get the fat off on your own, I doubt you have the discipline to keep it off.

If you paid $60,000 for a lifetime gym and diet program, would that make you more likely to work out and eat Jenny Craig meals to the point of success?

A sunk wager is no different than a sunk cost, except a sunk wager has an offsetting transaction to cancel the derivative contract.

Charlie Schaezlein August 9, 2010 at 2:56 pm

There is a website out there that works basically along these lines. The difference here is that everyone has negative expected revenue and can’t make money by beating expectations, but still kind of a fun thing. They claim a 66+% (I’m adding the +, since i’m assuming at least some portion of people who skip their weigh-ins do so by accident, not because they failed) success rate… I don’t know what percent of people actually succeed in their weight loss goals, but sounds fairly promising. Just a thought

http://loseitorloseit.com/

JasonL August 9, 2010 at 4:54 pm

I’ve dropped 20 lbs since January in a way that at least to me feels low impact. My baseline is that I’ve always worked out at least 3-4 times per week, more recently with an emphasis on weights and high intensity burst activity (sprints, stair running, kettlebells, etc.), but I was still up to 195 on a 5’7 frame. Basically I knew that whatever else there was for me to do, it wasn’t on the activity side. I made a very dietary rules:

1) Forced consumption of protein. After each workout a protein bar of at least 16g of protein must be eaten. This is easy. On non workout days, I’ll do smoked salmon or greek yogurt to get that once per day big protein in.

2) There is no need for a starch component to any meal. Replace the feeling of starch with 1/2 tsp olive oil on a vegetable serving. This is shockingly effective for me in terms of killing the carb crave or still feeling hungry without a starch.

That’s it. As time went on, I’d reduce carb intake in other ways, but I’m not nutty about it. I eat what I want when I go out. There are 3 meals in the day, and carb restricting even just one of them is a big help. Bacon and eggs, no toast. Done. It’s basically foring an increase in protein as an offset to a reduction in carbs. YMMV, but for me I don’t even notice it. I don’t obsess about sodium or red meat (I like red meat) or even total calories. I’ve found that the removal of starch components to meals all by itself results in calorie reduction, and consumption of oils takes up the slack.

DPR August 9, 2010 at 5:21 pm

@agnostic: thanks for a detailed explanation of the low-carb rationale. I still do not buy it all though. Fat has 9 kcal of energy per gram, twice that of carbs and protein at 4 kcal each. Maybe the body processes fat, protein, and carbs differently but once it’s glucose it’s glucose- insulin doesn’t discriminate. Exercise puts that glucose to good use, building cardiorespiratory endurance.

Pre-agricultural man didn’t have to worry about atherosclerosis or diabetes because they never lived long enough for it to become a problem. Fatty meats were their best sources of calories, iron, and B vitamins. Fructose and lactose also readily convert to glucose just like maltos, so those sources of sugar can cause weight gain too.

I’m concerned the low-carb diet fad is just another effort-free diet scam. I can boil down fitness and health into one phrase, “Consume right and exercise.” And we all know exactly what that means.

Ryan August 10, 2010 at 2:03 am
Mike Ayres August 10, 2010 at 12:59 pm

Wow! What an amazing story. I guess money is the biggest motivator. Congrats.

If any of you are interested in a special deal I’m doing for those who are looking to lose weight, check out my site at: http://fatlossfactor304.weebly.com/

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Mike Moffatt September 8, 2010 at 6:44 pm

Alex: Thanks again! Two years later and I’m at 12% body fat.

laser hair removal October 1, 2010 at 3:27 am

I always tend to keep the weight loss process to be a simple one. Proper adequate food and exercise will form the foremost and the necessary things, then comes adequate amount of resting and sleeping and the last one is drinking sufficient water. These are the steps that has helped me to have some good benefits.

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