Commitment Contracts

Gharad Bryan (gharad.bryan@yale.edu), Dean Karlan and Scott Nelson
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Gharad Bryan: Yale University
Scott Nelson: Yale University

Working Papers from Economic Growth Center, Yale University

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 commitment – those involving only psychological costs – and the welfare consequences of hard commitments – those involving actual costs – especially in the presence of bounded rationality.

Keywords: consumer/household economics; institutional and behavioral economics (search for similar items in EconPapers)
JEL-codes: D03 D14 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009-10
New Economics Papers: this item is included in nep-cbe and nep-evo
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http://www.econ.yale.edu/growth_pdf/cdp980.pdf (application/pdf)

Related works:
Working Paper: Commitment Contracts (2009)
Working Paper: Commitment Contracts (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:egc:wpaper:980

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