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Observability Increases the Demand for Commitment Devices

Author

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  • Christine L. Exley

    (Harvard Business School, Negotiation, Organizations & Markets Unit)

  • Jeffrey K. Naecker

    (Wesleyan University, Department of Economics)

Abstract

Previous research often interprets the choice to restrict one's future opportunity set as evidence for sophisticated time-inconsistency. We propose an additional mechanism that may contribute to the demand for commitment technology: the desire to signal to others. We present a field experiment where participants can choose to give up money if they do not follow through with an action. When commitment choices are made public rather than kept private, we find significantly higher uptake rates.

Suggested Citation

  • Christine L. Exley & Jeffrey K. Naecker, 2015. "Observability Increases the Demand for Commitment Devices," Harvard Business School Working Papers 16-064, Harvard Business School, revised Mar 2016.
    • Handle: RePEc:hbs:wpaper:16-064
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    Cited by:

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    2. Le Yaouanq, Yves, 2015. "Anticipating Preference Reversal"," TSE Working Papers 15-585, Toulouse School of Economics (TSE).
    3. Oliver Himmler & Robert Jäckle & Philipp Weinschenk, 2019. "Soft Commitments, Reminders, and Academic Performance," American Economic Journal: Applied Economics, American Economic Association, vol. 11(2), pages 114-142, April.
    4. Fosgaard, Toke R. & Soetevent, Adriaan R., 2022. "I will donate later! A field experiment on cell phone donations to charity," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 549-565.
    5. Frank Schilbach, 2019. "Alcohol and Self-Control: A Field Experiment in India," American Economic Review, American Economic Association, vol. 109(4), pages 1290-1322, April.
    6. Andreoni, James & Serra-Garcia, Marta, 2021. "Time inconsistent charitable giving," Journal of Public Economics, Elsevier, vol. 198(C).
    7. James Andreoni & Marta Serra-Garcia, 2021. "The Pledging Puzzle: How Can Revocable Promises Increase Charitable Giving?," Management Science, INFORMS, vol. 67(10), pages 6198-6210, October.
    8. Che-Wei Liu & Guodong (Gordon) Gao & Ritu Agarwal, 2019. "Unraveling the “Social” in Social Norms: The Conditioning Effect of User Connectivity," Information Systems Research, INFORMS, vol. 30(4), pages 1272-1295, April.
    9. Mariana Carrera & Heather Royer & Mark Stehr & Justin Sydnor & Dmitry Taubinsky, 2022. "Who Chooses Commitment? Evidence and Welfare Implications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(3), pages 1205-1244.
    10. Andrej Woerner, 2021. "Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising," CESifo Working Paper Series 9503, CESifo.
    11. Segovia, Michelle S. & Palma, Marco A. & Nayga, Rodolfo M., 2020. "Can episodic future thinking affect food choices?," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 371-389.
    12. Woerner, Andrej, 2023. "Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277711, Verein für Socialpolitik / German Economic Association.
    13. Mohamed Abouaziza, 2022. "Farmer constraints and relational contracts: evidence from agricultural value chains in East Africa," Economics PhD Theses 0122, Department of Economics, University of Sussex Business School.

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    More about this item

    Keywords

    field experiment; commitment; signaling; time inconsistency;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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