Toggle Mobile Menu
Academic Programs

Personalizing policies can theoretically increase their effectiveness. However, personalization

is difficult when individual types are unobservable, especially when policymaker

and individual preferences are not aligned, causing individuals to misreport their

type. Mechanism design offers a strategy to overcome this issue: offer a menu of policy

choices, and make it incentive-compatible for participants to choose the “right” variant.

Using a randomized controlled trial of incentives for exercise among 6,800 adults with

diabetes and hypertension in urban India, we show that personalizing with mechanism

design substantially improves program performance, increasing the treatment effect on

exercise by 75% without increasing program costs relative to a one-size-fits-all benchmark.

Personalizing with mechanism design also performs favorably relative to another

potential strategy for personalization: personalizing based on observables.