Demand and supply of infrequent payments as a commitment device: evidence from Kenya
Lorenzo Casaburi and
Rocco Macchiavello ()
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
Despite extensive evidence that preferences are often time-inconsistent, there is only scarce evidence of willingness to pay for commitment. Infrequent payments for frequently provided goods and services are a common feature of many markets and they may naturally provide commitment to save for lumpy expenses. Multiple experiments in the Kenyan dairy sector show that: (i) farmers are willing to incur sizable costs to receive infrequent payments as a commitment device, (ii) poor contract enforcement, however, limits competition among buyers in the supply of infrequent payments. We then present a model of demand and supply of infrequent payments and test its additional predictions.
JEL-codes: K12 L66 O13 O17 Q12 Q13 (search for similar items in EconPapers)
Pages: 33 pages
New Economics Papers: this item is included in nep-agr, nep-exp, nep-law and nep-mfd
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Published in American Economic Review, 1, February, 2019, 109(2), pp. 523-555. ISSN: 0002-8282
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Journal Article: Demand and Supply of Infrequent Payments as a Commitment Device: Evidence from Kenya (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100180
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