Harvard Grads' Startup Rewards Gym Rats, Penalizes Couch PotatoesAn Ivy League economics assignment becomes a profitable business proposition: Work out or pay up.

Harvard students Yifan Zhang and Geoff Oberhofer were conducting research on how financial incentives can influence behavior when they realized their work had applications outside the classroom. Soon, they turned their behavioral economics research into a real-world business plan.

Zhang and Oberhofer createdGymPact, a free iPhone app that uses financial incentives to motivate gym-goers and penalize couch potatoes. The concept works like an old-fashioned swear jar: Users promise to exercise a certain number of times each week and are charged for failing to meet their goals. At a minimum, they must commit to one 30-minute workout per week and agree to pay a $5 penalty for skipping it, although they can up the ante as much as they like. At the end of each week, GymPact bills (via credit card) those who fail to meet their goals; the money collected is distributed to users who kept their commitments.