Asked by Keaton O'Brien on Jun 23, 2024
Verified
According to behavioral economists, precommitments
A) help people overcome their self-control problems caused by time inconsistency.
B) do not fundamentally alter decisions because they do not change the benefits or costs of a particular action.
C) end up being more costly, as people regularly violate them and incur penalties.
D) overcome cognitive biases introduced by brain System 2.
Precommitments
Binding agreements made in advance to restrict future actions or decisions, often used in behavioral economics to help individuals stick to long-term goals.
Time Inconsistency
The tendency of a person or entity to change their planned course of action over time due to a change in preferences.
Self-Control Problems
Self-control problems refer to the difficulty individuals face in resisting short-term temptations in order to achieve long-term goals.
- Acquire knowledge on how precommitments serve as a solution to combat the challenges posed by time inconsistency and self-control issues.
Verified Answer
Learning Objectives
- Acquire knowledge on how precommitments serve as a solution to combat the challenges posed by time inconsistency and self-control issues.
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