What Is A Commitment Device In Behavioral Economics?

A commitment device is a strategy or tool that is used to help people stick to a plan or decision, even when it may be tempting to deviate from it. This can include setting goals and deadlines, making public commitments, or using external incentives or punishments to help people follow through on their plans. Commitment devices are often used to help people overcome their own biases and impulses, and to help them make decisions that are in their long-term best interest.

Commitment devices can be effective in helping people to follow through on their plans, but they can also have some drawbacks. For example, using external incentives or punishments can be expensive or impractical, and may not always be effective in changing people’s behavior. To maximize the effectiveness of commitment devices, it is important to carefully consider the specific goals and challenges that people are facing, and to choose the right combination of strategies and tools to help them succeed.

Related Behavioral Economics Terms