CollegeBetter: Parimutuel Betting Markets as a Commitment Device and Monetary Incentive

Despite being identified as a key contributor to student shortcomings, procrastination in education has received little attention from the behavioral economics and the economics of education literatures. This project examines the role of commitment and motivation by teaming up with a program called CollegeBetter, which acts as a commitment device and monetary incentive to improve undergraduate academic performance. The zero-sum mechanism is based off a parimutuel betting market, where students join a pool by placing a monetary wager on themselves to achieve the pool’s “commitment challenge”. Students who successfully commit to the challenge 1) recover their wagers and 2) split losing wagers proportionally. A series of pilot experiments suggest that students randomly selected to participate experience contemporaneous boosts in performance relative to students who applied for a spot but were randomly excluded. The researchers will implement a series of field experiments through a large-scale expansion of the CollegeBetter program at a diverse, public university in California in order to draw causal inference on the effectiveness of the program and to track the general equilibrium impacts of the program on student outcomes.