Pension Contribution as a Commitment Device: Evidence of Sophistication among Time-inconsistent Households

Patricia Sourdin ()
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Patricia Sourdin: School of Economics, University of Adelaide

No 2005-17, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

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.

Pages: 35 pages
Date: 2005-10
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Citations: View citations in EconPapers (1)

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