Time Inconsistency, Sophistication, and Commitment An Experimental Study

Qing ⓡ Zhang, Ben Greiner

Publikation: Working/Discussion PaperWU Working Paper

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Abstract

We experimentally study the relationship between time inconsistency, sophistication about time inconsistency, and self-commitment. Previous research has interpreted
demand for commitment devices as evidence for the sophistication of a time-inconsistent decision-maker. In our laboratory experiment, we attempt to measure
sophistication directly by way of a cognitive test. We then test the hypothesis that people who are both time-inconsistent and show high cognitive capacity take up commitment devices when offered in the strategic game between their current and their future self. For experimental laboratory commitment choices, we cannot
detect a moderating effect of cognition on commitment demand of time-inconsistent subjects. However, we find that the existence of time-inconsistent preferences and
sophistication (proxied by cognitive performance) can predict the demand for savings commitment in our hypothetical survey vignette question.
OriginalspracheEnglisch
ErscheinungsortVienna
HerausgeberWU Vienna University of Economics and Business
PublikationsstatusVeröffentlicht - 25 März 2020

Publikationsreihe

NameDepartment of Strategy and Innovation Working Paper Series
Nr.12/2020

WU Working Paper Reihe

  • Department of Strategy and Innovation Working Paper Series

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