Time inconsistency, sophistication, and commitment: An experimental study

Qing Zhang and Ben Greiner

Economics Letters, 2021, vol. 206, issue C

Abstract: We experimentally study the relationship between time inconsistency, sophistication about time inconsistency, and self-commitment. Previous research has interpreted demand for commitment devices as evidence for the sophistication of a time-inconsistent decision-maker. In our laboratory experiment, we attempt to measure sophistication directly by way of a cognitive test. We then test the hypothesis that people who are both time-inconsistent and show high cognitive capacity take up commitment devices when offered in the strategic game between their current and their future self. For experimental laboratory commitment choices, we cannot detect a moderating effect of cognition on commitment demand of time-inconsistent subjects.

Keywords: Time-inconsistency; Sophistication; Present bias; Future bias (search for similar items in EconPapers)
JEL-codes: C90 C91 D91 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Time Inconsistency, Sophistication, and Commitment An Experimental Study (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:206:y:2021:i:c:s0165176521002597

DOI: 10.1016/j.econlet.2021.109982

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