Precommitment without external help

In an interesting post Bill Kaye-Blake discusses how we might overcome internalities through autonomous precommitment. As we’ve discussed previously, commitment mechanisms tend to involve external contracts: agreements with friends, or monetary contracts are common. But might we be able to commit our future self without external mechanisms?

I wonder if selecting identities is a way that people overcome the problem of time-inconsistent preferences.

By deciding ‘I am a vegetarian’ (or ‘I am a non-smoker’ or ‘I am a saver’), you construct the immediate consumption problem differently. The impact of the burger or cigarette isn’t on your heart or lungs but on your identity. The marginal impact on your physical health may be nearly zero, but the impact on your identity is binary. You are no longer that which you have decided to be.

Selecting an identity allows you to make a portfolio of decisions all at once. You commit to the identity. Then, to preserve the identity you have to do the behaviour in the future and in the now. Identity becomes a strategy for pre-commitment.

Eric points to this paper by Sunstein and Ullman-Margalit, which says much the same thing

3 replies
  1. Eric Crampton
    Eric Crampton says:

    I like that Sunstein piece. For me, it ties in very nicely into the expressive voting literature (Brennan/Buchanan, Brennan/Lomasky, Brennan/Hamlin). There’s no reason to expect inefficiency in consumption choices where identity issues are at play – people weigh up those costs and benefits along with everything else. But expressiveness is really cheap at the ballot box and, because it comes with 100% probability rather than the 0% attached to instrumental considerations there, swamps instrumental voting.

    • jamesz
      jamesz says:

      Interesting. I haven’t read any of the voting literature so the idea of identity as a maximising choice is new to me. It sounds interesting, but have the endogeneity problems of choice/identity been disentangled? I could search this but I’m sure you can point to a paper off the top of your head 😛

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