An Economy of Scales

An average of 140 employees at Wesley Willows participate in the program, which started eight months ago. They get $3 per percentage point of weight lost. Together, they have lost 806 pounds. Holmgaard said the company has spent $11,500 on the Tangerine program, including rewards. The company's health-care costs have tumbled more than $146,000. "Certainly paying them gets their attention," Holmgaard said.

My wife's agreement to pay me certainly got me keyed up. I have tried the following strategies to lose weight: the Atkins diet, the South Beach Diet, Jenny Craig, Slim Fast bars, eating sushi every day for lunch, and joining, in the past five years, three gyms and one swimming pool. Did I mention I'm still fat? I start programs, then stop. I exercise for a few weeks, then stop. I don't know how many times I have stared down at my plate and said to myself, "This is the last time I will eat fries."

But I've always been easily motivated to do things for money. I was a pitcher back in my Little League days. My dad used to pay me $3 per strikeout. If I struck out three batters, that was enough to buy to a box of baseball cards to show off at school. My dad wanted me to be such a good pitcher that I convinced him to pay me for striking out pretend batters when we practiced in the back yard. I threw so much that I eventually got tendinitis in my shoulder, pretty much ending my baseball career. In the end, cash failed.

I thought of that the other day when I was talking to Barry Nalebuff, a professor at Yale University and one the country's top game-theory economists. He has studied weight-loss incentives extensively. When I told him what my wife was paying me, he said: "It's not going to work. It's not big enough. Not even close." He had another idea: Take a picture of myself in a Speedo, and if I don't lose weight, he gets to hang the picture in my office. For extra motivation, he suggested I procure a similar picture of my wife, theorizing (correctly) that she wouldn't want my colleagues to see that much of her. "Then you'll really lose the weight," he said. He has done two nationally televised studies showing that this strategy works.

Nalebuff thinks the weight loss will happen only if there is something of importance being risked. When I told him that my wife might kill me under his proposed arrangement -- thereby defeating the purpose of me losing weight -- he suggested I enter into a contract in which I agree to pay him if I don't drop some pounds. "As much as people don't like to lose money, what they really don't like to lose is their own money," he said.

In fact, some of his Yale colleagues are in the final stages of launching a business based on this very concept. They have started a company called stickK.com that will allow people to take out a contract on themselves. They pick a price. If they don't lose a certain amount of weight, they lose the money, either to a charity, friends or family. Ian Ayres, one of the company's founders, said he hopes the Web site makes money by selling advertisements and forming corporate partnerships.

"The basic idea is to let economic incentives have a chance," he said. "It's been very hard to produce successful results through traditional weight-loss methods."

Ayres took out a contract on himself with another of the company's founders. He needed to get down to 185 pounds, losing at least a pound a week or forfeiting $500 for each week he failed. Sure enough, he dropped below 185 pounds. Now if his weight goes above 185 pounds, a penalty kicks in. He has avoided more than $21,000 in potential penalties. "It's been a free way to lose weight," Ayres said.

He added, "Thousands of studies have shown that people work harder to avoid losses than to gain a similar amount."

I've taken all of this in, and I've decided to try something a little different that I think will work for me. My wife will pay me $5 for every pound I drop from her private cash stash. We will take measurements at the end of every month. Then, with my private stash, I will double what she gave me and send all of it to the St. Jude Children's Research Hospital in Memphis, where kids with cancer are given another chance at life. I just had a son of my own. He is healthy. But I have been to St. Jude's and have seen kids who aren't. I'll be working for them. I start today.