Commitment device

What is a Commitment Device?

A commitment device is a voluntary arrangement made in advance to make a future departure from a plan harder or more costly. It can restrict options or create financial, social, or psychological consequences for not following through.

Bryan, Karlan, and Nelson (2010) review hard and soft commitments and evidence about both demand and effectiveness. The value of a device depends on its terms, the person’s preferences, and the situation.

Hard and Soft Commitments

Hard commitments attach an economic consequence to following or abandoning the plan. The review gives a savings account that withholds interest when a required monthly deposit is missed: failing to save changes the financial outcome.

Soft commitments primarily change the psychological consequences. The review gives a separate account earmarked for a child’s education. Spending that money on a party remains possible, but may now feel like breaking a specific commitment. The categories overlap: losing interest can also feel disappointing, and a soft arrangement can have small practical costs.

What counts as a commitment device?

Odysseus asking his crew to tie him to the mast is the classic illustration. He expected that a future version of himself would want to steer toward the Sirens, so he restricted that future choice in advance.

Modern examples include a deposit contract that forfeits money if a goal is missed and software that blocks a chosen distraction during set hours. The first changes financial consequences. The second restricts an option. Neither is automatically better because it is “harder”: hard and soft describe how a commitment operates, not how well it works.

For example, a self-imposed deadline with a consequence for missing it can act as a commitment. A goal or reminder alone need not qualify: writing down an intention is different from changing what happens if you abandon it. An automatic transfer is not necessarily a commitment device if the money remains just as easy to move back. The arrangement must meaningfully change later options or consequences. A device can also impose costs when circumstances change, so adopting it and following it are not automatic evidence of improved wellbeing.