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People do not demand commitment devices because they might not work

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  • Westphal, Ryan

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.

Suggested Citation

  • Westphal, Ryan, 2024. "People do not demand commitment devices because they might not work," Journal of Economic Behavior & Organization, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:jeborg:v:228:y:2024:i:c:s0167268124003706
    DOI: 10.1016/j.jebo.2024.106756
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    More about this item

    Keywords

    Present bias; Commitment; Naivete; Beliefs; Volunteering;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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