Pension Contributions as a Commitment device: evidence of sophistication among time-inconsistent households

Patricia Sourdin
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Patricia Sourdin: The University of Adelaide

Public Economics from EconWPA

Abstract: Sophisticated agents with self-control problems value commitment devices that constrain future choices. Using Australian household data, I test whether these households value commitment devices in the form of illiquid pension contributions. Applying various probabilistic choice models, the results confirm the conjecture that households with problems of self-control are more likely to invest in illiquid pensions while less likely to hold very liquid forms of assets.

Keywords: commitment device; pensions; intertemporal choice (search for similar items in EconPapers)
JEL-codes: D91 H31 E21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-mac and nep-pbe
Date: 2005-12-12
Note: Type of Document - pdf
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