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  • The Problem of Present Bias (Hyperbolic Discounting) and Time-Inconsistent Behavior

Commitment Devices as a Strategy Against Present Bias

A commitment device is a strategy people knowingly use to counter their own present bias, or hyperbolic discounting. It involves creating a mechanism that binds them to a future course of action, thereby increasing the likelihood that they will follow through on long-term goals instead of procrastinating.

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7 months ago

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CORE Econ

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Introduction to Microeconomics Course

The Economy 2.0 Microeconomics @ CORE Econ

Ch.9 Lenders and borrowers and differences in wealth - The Economy 2.0 Microeconomics @ CORE Econ

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  • Commitment Devices as a Strategy Against Present Bias

  • Source: 'Phishing for Phools' by Akerlof and Shiller

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  • Analyzing Self-Control Strategies

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  • To overcome the tendency to procrastinate on a long-term goal, an individual might intentionally create a situation that makes it more costly or difficult to deviate from their plan in the future. This self-imposed strategy is known as a(n) ________.

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