Application: Pedalling for Television Time: Applying the Concepts Do people respond to incentives. To illustrate the notion that people are rational respond to incentives consider an experiment conducted by researchers at St. Luke's Roosevelt Hospital in New York City.

The researchers addressed the following question:

If child must pedal a stationary bicycle to run a television set, will he watch less TV? The researchers randomly assigned obese children, ages 8 to 12, to two types of TVs. The first type of TV had a stationary bicycle in front of it, but the TV operated independently of the bicycle: No pedalling was required to operate the TV. In contrast, the second type of TV worked only if the child pedalled a bike facing the TV. The kids in the control group (no pedalling required) watched an average of 21 hours of TV per week, while the kids in the treatment group (pedalling required) watched only 2 hours per week. In other words, kids respond to incentives, watching less TV when the cost of watching is higher.