Commitment to Self-Rewards

Alexander Koch and Julia Nafziger

No 4049, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Self-administered rewards are ubiquitous. They serve as incentives for personal accomplish¬ments and are widely recommended as tools for overcoming self-control problems. However, it seems puzzling why self-rewards can work: the prospect of a reward has a motivating force only if the threat of self-denial of the reward after low performance is credible. We explain how a rational forward-looking individual may achieve commitment to self-rewards, by applying Köszegi and Rabin's (2006) model of endogenous reference point formation to a self-regulation problem. Our results show why and when self-regulation built on self-rewards can be successful and thus illustrate the power, but also the limits, of self-rewards.

Keywords: time inconsistency; self-reinforcement; reference-dependent preferences; self-control; motivation (search for similar items in EconPapers)
JEL-codes: A12 C70 D86 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2009-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in European Economic Review , 2014, 68, 151-167.

Downloads: (external link)
https://docs.iza.org/dp4049.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp4049

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().