Book
How are preferences for commitment revealed?
NBER working paper series, National Bureau of Economic Research
2019
Abstract
A large literature treats take-up of commitment contracts, in the form of choice-set restrictions or penalties, as a smoking gun for (awareness of) self-control problems. This paper provides new techniques for examining the validity of this assumption, as well as a new approach for detecting (awareness of) self-control problems. Theoretically, we show that with some uncertainty about the future, demand for commitment contracts is closer to a special case than to a robust implication of models of limited self-control. In a field experiment with 1292 members of a fitness facility, we find that many participants take up commitment contracts both for going to the gym more and for going to the gym less, and there is a significant positive correlation in demand for these two types of contracts. This suggests that commitment contract take-up reflects, at least in part, something other than the desire to change own future behavior, such as demand effects or "noisy valuation." Moreover, we find that commitment contract take-up is negatively related to awareness of self-control problems: a novel information treatment that increased awareness of self-control problems reduced demand for commitment contracts. We address the limitations of using commitment contracts as a measurement tool by showing that a combination of belief forecasts and willingness to pay for linear incentives provides more robust identification of limited self-control and people's awareness of it. We use the methodology to obtain some of the first parameter estimates of partially-sophisticated quasi-hyperbolic discounting in the field
Metrics
3 Record Views
Details
- Title
- How are preferences for commitment revealed?
- Creators
- Mariana CarreraHeather RoyerMark StehrJustin Reuel SydnorDmitry TaubinskyNational Bureau of Economic Research
- Series
- NBER working paper series
- Publisher
- National Bureau of Economic Research; Cambridge, Mass
- Number of pages
- 1 online resource (86 pages) : illustrations
- Resource Type
- Book
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Identifiers
- 991021807006404721