Performance after Rewards and Penalties: An Empirical Study of Gain-Loss Incentive Structure in an mHealth App

Abstract

The rapid advancement of digital technology and growing interest in well-being have fueled the mobile health (mHealth) market. mHealth apps aim to support positive behavioral changes and maintain high user motivation through various health-related activities. This study examines the impact of a gain-loss incentive structure within mHealth apps, where users make a monetary deposit that could result in rewards, penalties, or neither, based on performance. Using data from a leading mHealth app platform in South Korea, we explore how gain and loss incentives affect users’ subsequent performance. Our findings show that gains enhance performance, while losses diminish it. Unlike previous studies, we reveal that users who experience losses exhibit risk-averse behavior by lowering their deposit amounts rather than improving performance. These insights improve our understanding of financial incentives in mHealth and highlight potential drawbacks, offering valuable guidance for mHealth app platforms implementing such systems.