Post by fireopal on Jan 12, 2010 3:46:34 GMT 4
Commitment Contracts
Gharad Bryan
Yale University
Dean S. Karlan
Yale University - Economic Growth Center; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab; Center for Global Development
Scott Nelson
Yale University
October 23, 2009
Yale Economics Department Working Paper No. 73
Yale University Economic Growth Center Discussion Paper No. 980
Abstract:
We review the theoretical and empirical literature on commitment devices. A commitment device is any arrangement, entered into by an individual, with the aim of making it easier to fulfill his or her own future plans. We argue that there is growing empirical evidence supporting the proposition that people demand commitment devices and that these devices can change behavior. We highlight the importance of further research exploring soft commitments - those involving only psychological costs - and the welfare consequences of hard commitments - those involving actual costs - especially in the presence of bounded rationality.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1493378_code1306637.pdf?abstractid=1493378&mirid=2
Gharad Bryan
Yale University
Dean S. Karlan
Yale University - Economic Growth Center; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab; Center for Global Development
Scott Nelson
Yale University
October 23, 2009
Yale Economics Department Working Paper No. 73
Yale University Economic Growth Center Discussion Paper No. 980
Abstract:
We review the theoretical and empirical literature on commitment devices. A commitment device is any arrangement, entered into by an individual, with the aim of making it easier to fulfill his or her own future plans. We argue that there is growing empirical evidence supporting the proposition that people demand commitment devices and that these devices can change behavior. We highlight the importance of further research exploring soft commitments - those involving only psychological costs - and the welfare consequences of hard commitments - those involving actual costs - especially in the presence of bounded rationality.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1493378_code1306637.pdf?abstractid=1493378&mirid=2