People do not demand commitment devices because they might not work

Ryan Westphal

Journal of Economic Behavior & Organization, 2024, vol. 228, issue C

Abstract: Low demand for pure commitment in real markets presents a puzzle. A possible explanation is that individuals are unaware of their present bias and their need for commitment. I test the relationship between perceived intertemporal inconsistency and demand for commitment in a novel context, volunteering. I run an experiment that successfully corrects subjects’ beliefs about their present bias and find that this increased awareness does not increase demand for commitment. This low demand for commitment is not driven by a perceived lack of present bias, but rather subjects’ accurate belief that they may fail to follow through, even with the offered level of commitment.

Keywords: Present bias; Commitment; Naivete; Beliefs; Volunteering (search for similar items in EconPapers)
JEL-codes: C91 D15 D83 D9 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:228:y:2024:i:c:s0167268124003706

DOI: 10.1016/j.jebo.2024.106756

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