Commitment, Flexibility, and Optimal Screening of Time Inconsistency
نویسندگان
چکیده
منابع مشابه
Commitment, Flexibility, and Optimal Screening of Time Inconsistency
I study the optimal supply of exible commitment devices to people who value both commitment and exibility, and whose preferences exhibit varying degrees of time inconsistency. I nd that, if time inconsistency is observable, then both a monopolist and a planner supply devices that enable each person to commit to the e¢ cient level of exibility. If instead time inconsistency is unobservable, ...
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This paper develops a theory of optimal provision of commitment devices to people who value both commitment and exibility, and whose preferences di¤er in the degree of time inconsistency. If time inconsistency is observable, then both a planner and a monopolist provide devices that help each person commit to the e¢ cient level of exibility. But the combination of unobservable time inconsisten...
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We make three points. First, ex ante e¢ cient contracts often require ex post ine¢ ciency. Second, the time inconsistency problem for the government is more severe than for private agents because re sale e¤ects give governments stronger incentives to renegotiate contracts than private agents. Third, given that the government cannot commit itself to not bailing out rms ex post, ex ante regulat...
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An agent with dynamically inconsistent preferences may deviate from her plan of action as the future draws near. An exponential discounter may do exactly the same when facing an uncertain future. Through an experiment we compare preference-based vs. uncertainty-based explanations for choice reversal over time by eliciting choices for pre-commitment and flexibility. Evidence of widespread commit...
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This paper explores the consequences and implications of the “dual role of promotion” in an environment where a firm must simultaneously achieve two distinct goals – assignment and incentive provision – via the strategic use of promotions. We argue that the efficient promotion rule is generally not implementable, as it necessarily entails timeinconsistent objectives: the firm is always tempted ...
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ژورنال
عنوان ژورنال: Econometrica
سال: 2015
ISSN: 0012-9682
DOI: 10.3982/ecta11851