The current paper clarifies the conditions under which deposit contracts are sufficient to motivate people to perform daily breathing exercises using a smartphone app. Our analysis compares the impact of repeated deposit contracts with the impact of small bonus incentives. Accepting the daily contract provided the same monetary gain from exercising as the bonus, but led to a larger loss when the participants failed to exercise. Theoretical analysis shows that deposit contracts are expected to be more effective than bonus incentives when the probability of failing to practice due to an unexpected busy schedule is sufficiently low. These predictions are supported by a field experiment with more than 180 participants. While the bonus incentives failed to increase the exercise rate, repeated deposit contracts boosted it from 58% to 83%. Moreover, the use of the contracts eliminated much of the cost that the intervention designer has to bear.
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