What is a commitment contract?
A promise with a price on breaking it. While you’re motivated, you agree to lose money, or something else you care about, if you don’t follow through. Later, when you’d rather quit, quitting costs you.
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Commitment devices, in plain English
A commitment device is anything you set up now to box in your future self. Putting the alarm clock across the room. Not keeping biscuits in the house. Telling your manager the draft will be ready on Friday.
A commitment contract is the version with money attached. You name a goal, a deadline and an amount, and you agree to lose that amount if you miss. It’s often written down, and often has a referee: someone who checks, so you can’t quietly let yourself off.
The idea is simple. You already know that on Tuesday night you’ll want to skip. A contract makes that Tuesday choice more expensive, decided by the version of you who isn’t tired yet.
What the research found
Two field experiments tested the idea, both published in American Economic Journal: Applied Economics.
Smoking, 2010. Smokers were offered a savings account called CARES. They deposited money for six months, then took a urine test for nicotine. Pass, and the money came back; fail, and it went to charity. Of the smokers offered it, 11 percent signed up. Those randomly offered CARES were “3 percentage points more likely to pass the 6-month test” than the control group, and the effect held in surprise tests at 12 months (Giné, Karlan and Zinman).
The gym, 2015. Workers at a Fortune 500 company were offered a financial incentive to use the company gym for four weeks. On its own, that “generated only small lasting effects.” The groups also offered a commitment contract at the end of the program, funded with their own money, showed “significant long-run changes, detectable even several years after the incentive ended” (Royer, Stehr and Sydnor).
What to take from them: both found real effects, and they showed up among people who chose to commit. In the smoking study, 89 percent of the people offered a contract said no, which is a fair choice too.
Two ways to design one
The difference is where the money goes when someone misses.
You pay if you miss
You set the goal and the amount, and you’re charged only if you fall short. Hit every goal and it costs nothing.
stickK sends the money to a friend, a charity or an “anti-charity” you choose. Beeminder charges you when you cross its line. Forfeit charges your card and says it keeps the money for now.
A group prize pool
Everyone pays the same entry fee up front, into a prize pool. At the end of the challenge, everyone who qualified splits it equally, so missed money goes to the people who finished.
That’s how Stint works, for daily focused work. You’re never charged more than your entry fee. If a pool has a platform cut and nearly everyone qualifies, a share can come to less than the entry fee.
Compared side by side in stickK, Beeminder and Forfeit versus Stint. The arithmetic of a split is in how prize pools work.
How to write one that holds
- Commit to an action, not an outcome. “Write 500 words every weekday” is yours to control. “Get the book deal” isn’t.
- Make it checkable. A number, a time, a photo, an app that measures it. If you can argue about whether you did it, you will.
- Set an end date. A fixed length, such as a month, gives you a finish line and a natural point to decide whether to go again.
- Pick an amount that stings. Enough that you’d be annoyed to lose it, never so much that losing it would hurt your rent or your bills.
- Agree the excuses in advance. Illness? A family emergency? Decide now what counts, with your referee, so you’re not negotiating with yourself at 11pm.
- Plan for the day after. In the gym study, the incentive on its own left only small lasting effects. Know what keeps the habit going when the contract ends.
Commitment contracts with friends
Doing it together changes the feel. You’re not only protecting your money, you’re showing up for people who are doing the same thing. Three ways to set it up:
- Pay the others. Everyone sets the same goal; whoever misses a week pays the rest. Simple, but someone has to keep score and chase payments.
- A friend as referee. stickK lets you invite a referee and send missed money to a friend.
- A private pool. In Stint, you create a private pool and share it with friends by invite code or link. Everyone pays the same entry fee, your phones verify the focus time, and everyone who meets the goal splits the prize pool. Hosting a pool needs Stint Pro; joining one doesn’t.
Want accountability without money? An accountability buddy is the place to start.
When a commitment contract is a bad idea
- You can’t afford to lose the money. Then the pressure stops being useful. Use a smaller amount, or none.
- The goal depends on luck or other people. You’ll lose money for things you didn’t control, and stop trusting the system.
- It’s about your health. Quitting smoking, losing weight, drinking less: a contract can sit on top of support from a doctor, not replace it.
- Missing would make you hide it. If you’d sooner fudge the numbers than admit a bad week, the contract is teaching the wrong thing. Make the goal smaller.
- Money changes how you feel about the activity. If something you enjoy starts to feel like a chore with a fine attached, drop the contract and keep the activity.
Stint pools with an entry fee are for adults 18 and over, and in some regions real-money challenges may be unavailable or offered with points instead.
Questions
What is a commitment contract?
A commitment contract is an agreement you make in advance to lose something you value, usually money, if you don’t do what you said. It’s set up while you’re motivated, so that quitting later costs you.
What is the difference between a commitment device and a commitment contract?
A commitment device is anything you arrange now to limit your choices later, like leaving your phone in another room. A commitment contract is one kind of commitment device: a written promise with money or another cost attached.
Do commitment contracts work?
In two field experiments, yes, for the people who chose them. Smokers offered a commitment savings account were 3 percentage points more likely to pass a nicotine test at six months, and workers offered a gym commitment contract showed changes still visible years later. In the smoking study, only 11 percent of those offered one signed up.
Can I make a commitment contract with friends?
Yes. You can agree that whoever misses pays the others, use an app that sends missed money to a friend, or take a challenge together in Stint, where everyone pays the same entry fee and those who qualify split the prize pool.
How much money should I put on a commitment contract?
Enough that losing it would annoy you, and never more than you can comfortably afford to lose. If the amount would cause real hardship, pick a smaller one or a different kind of commitment.
Take a focus challenge with friends
Stint is free to download for iPhone on iOS 18 or later. You pay a pool’s entry fee only when you join one.
