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When Incentives Aren‘t Enough: Evidence on Inattention and Imperfect Memory from HIV Medication Adherence
Financial incentives are widely used to encourage beneficial behaviors, but their effectiveness may be limited by inattention and imperfect memory. We study this in a randomized trial of HIV medication adherence in Mozambique. Financial incentives alone increase adherence by 10.6 percentage points, while pairing incentives with reminders increases adherence by 24.3 percentage points. We develop a model in which inattention to daily adherence and imperfect memory of payment eligibility reduce incentive effectiveness and show that reminders mitigate both frictions. Detailed medication refill data support the model’s predictions. The results suggest combining incentives with reminders can substantially increase program effectiveness.
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