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Commitment devices

Bryan, Gharad, Karlan, Dean and Nelson, Scott (2010) Commitment devices. Annual Review of Economics, 2 (1). pp. 671-698. ISSN 1941-1383

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Abstract

We review the recent evidence on commitment devices and discuss how this evidence relates to theoretical questions about the demand for, and effectiveness of, commitment. Several important distinctions emerge. First, we distinguish between what we call hard and soft commitments and identify how soft commitments, in particular, can help with various dilemmas, both in explaining empirical behavior and in designing effective commitment devices. Second, we highlight the importance of certain modeling assumptions in predicting when commitment devices will be demanded and examine the laboratory and field evidence on the demand for commitment devices. Third, we present the evidence on both informal and formal commitment devices, and we conclude with a discussion of policy implications, including sin taxes, consumer protection, and commitment device design.

Item Type: Article
Official URL: http://www.annualreviews.org/loi/economics
Additional Information: © 2010 Annual Reviews
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: C - Mathematical and Quantitative Methods > C0 - General
Sets: Departments > Economics
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 13 Feb 2012 16:59
URL: http://eprints.lse.ac.uk/41880/

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