Ulyssean Self-Control: Pre-commitment is effective, but choosing it freely requires good self-control

Can pre-commitment strategies benefit people with self-control problems, or does it mainly help those who are already successful at regulating their behavior? In Experiment 1 (N=1,012), pre-commitment led to better effort performance and higher earnings in an incentivized matrix-solving task. However, in Experiment 2 (N=1,010) participants with low (vs. high) self-control as a general trait were 35 percentage points less likely to choose the pre-commitment strategy when it was optional, which in turn was associated with worse performance and lower earnings for these participants. Providing information about the effectiveness of pre-commitment led to a small but significant increase in uptake, whereas random assignment to a “paternalistic” policy condition with forced pre-commitment was more effective. Pre-commitment is often seen as a solution to self-control problems, but the current results suggest that offering optional pre-commitment may exacerbate inequalities as it mostly benefits those who are already doing well: Individuals with good self-control.

Pricing Strategy and Quick Response Adoption System with Strategic Customers

This study determined the competitive advantage of a quick response (QR) system when a firm faces forward-looking customers with heterogeneous and uncertain valuations for a product, uncertain demand, and two selling periods. We identify two classes of pricing strategies, namely, no-price commitment strategy and price commitment strategy. Interestingly, the unique equilibrium is proven to exist if and only if most customers have high tastes on a product’s value. We also prove that when customers possess beliefs about the markdown in the second period being smaller enough, a firm obtains a high profit with price commitment; otherwise he obtains a high profit without price commitment. Moreover, we distinguish the competitive advantage of a QR system from two strategies. When a firm uses no-price commitment strategy, the value of QR system in the first period decreases and in the second period increases with customer’s strategic behavior. When a firm provides price commitment, the value of QR system in the first period may increase, decrease, or decrease first and then increase with customer’s strategic behavior. And the value of QR in the second period under price commitment strategy decreases or rises first and then decreases with customer’s strategic behavior.

Do Consumers Exploit Commitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption

This paper provides evidence concerning the extent to which consumers of liquor employ commitment devices. One widely recommended commitment strategy is to regulate alcohol consumption by deliberately manipulating availability. The paper assesses the prevalence of the “availability strategy” by evaluating the effects of policies that would influence its effectiveness—specifically, changes in allowable Sunday sales hours. It finds that consumers increase their liquor consumption in response to extended Sunday on-premises sales hours, but not in response to extended off-premises sales hours. The latter finding is inconsistent with widespread use of the availability strategy. (JEL D12, H75, K39, L66)