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Naivete, projection bias, and habit formation in gym attendance

Acland, Dan and Levy, Matthew (2013) Naivete, projection bias, and habit formation in gym attendance. Working paper series. Social Science Research Network.

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Abstract

We develop a model capturing habit formation, projection bias, and present bias in an intertemporal-choice setting, and conduct a field experiment to identify its main parameters. We elicit subjects' pre- and post-treatment predictions of post-treatment gym attendance, using a habit-formation intervention based on Charness and Gneezy (2009) as an exogenous shock to treated subjects' gym preferences. Projection-biased subjects, projecting their current habit state onto their future expectations, will, ex-ante, under-estimate any habit-formation effect of our treatment. Naive present-biased subjects in both groups will overestimate their future attendance. Like Charness and Gneezy, we find subjects do form a significant short-run habit, though we find substantial decay caused by the semester break. Subjects appear not to embed this habit formation into their ex-ante predictions. Approximately one-third of subjects formed a habit equivalent to the effect of a $2.60 per-visit subsidy, while their predictions correspond to 90% projection bias over this habit formation. Moreover, subjects greatly over-predict future attendance, which we interpret as evidence of partial naivete with respect to present bias: they appear to expect their future selves to be two-thirds less "present biased" than they currently are.

Item Type: Monograph (Working Paper)
Official URL: http://www.ssrn.com/
Additional Information: © 2013 The Authors
Divisions: Economics
Subjects: B Philosophy. Psychology. Religion > BF Psychology
G Geography. Anthropology. Recreation > GV Recreation Leisure
H Social Sciences > HB Economic Theory
JEL classification: Z - Other Special Topics > Z1 - Cultural Economics; Economic Sociology; Economic Anthropology > Z10 - General
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 11 Nov 2013 17:09
Last Modified: 01 Jul 2019 23:24
URI: http://eprints.lse.ac.uk/id/eprint/46827

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