Price Pacts

What it is

The structure is simple. A person puts their own money on the table in advance and loses it if they do not do the thing. That is the whole device, and its interest is in which psychological lever it pulls. A price pact is not an incentive in the ordinary sense, because nothing is being offered. The motivating force is the prospect of losing something already felt to be yours, which is why the concept is normally explained through loss aversion rather than through reward. Kahneman and Tversky's finding is that a prospective loss does more work than an equivalent prospective gain. A price pact is that asymmetry turned into a household appliance.

Nir Eyal names price pacts as one of three types of personal precommitment in Indistractable, alongside effort pacts and identity pacts. His own version is a hundred-dollar note taped to a wall calendar, to be burned on any week he does not exercise. He reports three years without burning it. He also used a ten-thousand-dollar pact with a friend to make himself finish the book.

He presents this as the best-evidenced technique in the book, and it is at this point that the argument needs handling with care, because the study underneath it has been retold wrongly almost everywhere, including in an earlier version of this publication's own vault.

The trial. Halpern, French, Small and colleagues (2015), in the New England Journal of Medicine, randomised 2,538 CVS Health employees and family members across four financial-incentive programmes for smoking cessation. Two of the four matter here. A reward programme offered up to $800 for quitting. A deposit programme asked participants to stake $150 of their own money, returned along with a $650 match on success. So the deposit participants risked less and could win less than the reward participants.

The result. On an intention-to-treat basis, measuring six-month sustained abstinence across everyone offered each programme, usual care produced 6.0 per cent, the reward programme 15.7 per cent, and the deposit programme 10.2 per cent. The deposit arm performed worse than the reward arm. The reason is not that deposits fail to motivate. It is that people refuse them. Take-up of the deposit programme was 13.7 per cent, against 90.0 per cent for the reward programmes. Almost nobody will stake their own money, and a programme nobody accepts cannot help the population it was offered to.

The number in circulation. The widely quoted figure for the deposit arm is 52 per cent, and it is not the arm's quit rate. It is a per-protocol figure, calculated among the small self-selected minority who accepted a deposit contract, and those people were already the most motivated quitters in the sample. Reporting it as the arm's result is a selection-effect error, and it is the error that turns a trade-off into a triumph. This publication's own vault carried exactly that error, describing the deposit group as having tripled the control's quit rate, until it was corrected against the primary paper on 2026-09-01. The exact per-protocol value could not be confirmed to a specific table cell without the full text, so the figure is not repeated here as a confirmed number.

What survives, and it is a real finding. Among people who would have accepted either programme, the authors' instrumental-variable analysis put deposit contracts 13.2 percentage points ahead of rewards, with a 95 per cent confidence interval of [3.1, 22.8]. That is a genuine and substantial result. It just answers a narrower question than the one the popular retelling answers. The honest summary is a trade-off rather than a triumph: deposits are more effective for the minority who will agree to them, and are refused by nearly everyone else. That is a more interesting claim than the one the technique is usually sold on, and it is the one the evidence supports.

Eyal himself names four pitfalls, and they matter more than the technique does. Price pacts fail against external triggers a person cannot escape. They suit short, defined tasks rather than open-ended ones. They punish people who are already struggling, which is a distributional point rather than an efficacy one. And they should never be used before the earlier steps of his model are in place, since a pact placed in front of an unexamined discomfort simply makes the discomfort expensive.

In effect

Research: the Halpern trial, told the right way round

Set the two panels of the figure beside each other and the finding stops being about willpower. A deposit contract asks for something almost nobody will give, which is money they already have, in advance, against a failure they have not yet had. Nine in ten people accepted a reward programme. Fewer than one in seven accepted a deposit programme. Once that gap exists, the deposit arm's population-level result is settled before the psychology gets a chance to operate, which is how a design that works better per participant ends up 5.5 percentage points behind on the measure that matters to anyone deciding what to offer. The instrumental-variable estimate, 13.2 percentage points in favour of deposits among those who would take either, is the part of the paper worth quoting, and it is the part nobody quotes. Note also which trial this is. It is not the 2009 two-arm Volpp trial in the same journal, which popular retellings routinely blur with it.

Everyday life: a hundred dollars taped to a calendar

Eyal's own price pact is a hundred-dollar note fixed to a wall calendar, to be burned in any week he does not exercise. He reports three years without burning it, and he used a much larger pact, ten thousand dollars staked with a friend, to force himself to finish Indistractable. Both are worth reading as illustrations of the structure rather than as evidence of anything. They are one person's account of his own behaviour, uncontrolled and reported by the person selling the technique, and the honest weight to give them is the weight of a good anecdote. What they do show clearly is the design requirement the trial's acceptance figure implies: a price pact only exists if someone agrees to it, and Eyal is exactly the kind of person who agrees to one.

Commerce and product design: an employer wellness programme where take-up decides everything

Halpern's trial was run inside a company, across 2,538 CVS Health employees and their family members, which makes it a product-design case as much as a clinical one. Anyone choosing between incentive designs for a workforce is choosing between a programme 90 per cent of eligible people will enter and a programme 13.7 per cent will enter. That is the decision, and no amount of per-participant efficacy rescues the second option at population scale. The general lesson transfers well beyond smoking: for any voluntary behaviour-change product, opt-in rate multiplies everything downstream, and a design that asks the user to accept a loss up front is buying its effectiveness with its reach. The interesting middle path the paper implies, rather than states, is to make deposits available to the minority who want them without making them the default offer.

What it does not say

It does not say deposit contracts do not work. Among people willing to accept one, the trial's instrumental-variable analysis puts them 13.2 percentage points ahead of reward programmes, 95% CI [3.1, 22.8], which is a large and real effect. The claim that fails is the population-level one.

It does not say the widely circulated 52 per cent was invented. It was a real number that measured something else: the quit rate among the 13.7 per cent who accepted a deposit contract, a group already selected for motivation. This is the most instructive class of error in the vault's whole verification record, because nothing was fabricated at any point. A per-protocol figure was reported as an arm's result, and a trade-off became a triumph. This publication made that error itself and corrected it on 2026-09-01. The exact per-protocol value is not repeated here, because it could not be confirmed to a specific table cell without the full paper.

It does not come with a fully verified provenance, and the page says so rather than implying otherwise. The figures above were reached through the paper's abstract, the CVS Health press release and the authors' own later summary. The full text sits behind the NEJM paywall, so table-level detail is secondhand. This publication's rule is that a claim reached at one remove carries that flag permanently, because two of the worst errors in its own audit were real documents misread at exactly this distance.

It does not say a price pact is appropriate for most problems. Eyal's four pitfalls are the limits, and the third is the one with a conscience attached: price pacts fail against external triggers a person cannot escape, they suit short defined tasks rather than open-ended ones, they punish people who are already struggling, and they should not be used at all before the earlier steps are in place. A device that takes money from people who fail is regressive by construction, and that is a design property rather than an unfortunate side effect.

Finally, it does not carry Eyal's own confidence. This page is tagged contested, downgraded from unverified on 2026-09-01 after the primary paper was checked. In this publication's vocabulary that means the headline claim is actively disputed by the primary literature, and that the concept is worth writing about rather than citing as fact.

Who developed it

Nir Eyal named price pacts as one of three types of personal precommitment in Indistractable (2019), ch. 24. The underlying instrument, the deposit contract, long predates the term, and the clinical trial the chapter relies on is Halpern and colleagues' work rather than Eyal's own. The chapter does not name the study's authors in its body text, which is part of why the claim went unchecked in this vault for as long as it did.

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