A tool that nudges people to commit to a choice in advance, or to postpone decision-making to a future period.
Individuals displaying present bias have inconsistent time preferences, and as a result they may exercise choices that have future consequences, but are not aligned with their long-term goals. One of the best established tools for this problem is the pre-commitment device so that exercised choices are truly representative of their preferences.
Commitment devices have been rigorously tested in a broad range of contexts, and they have outsized impacts of relevance to policymakers and health professionals.
- In the financial sector, Thaler and Benartzi (2004) developed Save More Tomorrow (SMarT), which automates contributions to a voluntary retirement savings program. The rate of contribution automatically increases as the employee’s salary increases, promoting pro-social savings behavior.
Other versions of this idea are savings accounts with restricted withdrawal dates, to prevent spending on impulse purchases, or accounts that are tied to a targeted goal.
- Tied accounts have been used to help smokers quit (Gine et al., 2010) and increase women’s intra-household decision making power (Ashraf et al., 2010).
Time-limited vouchers are another tool; these coupons lock individuals into making beneficial purchases, often in advance of actual use.
- In Kenya, farmers are offered discounts for fertilizer which are only redeemable post-harvest, when households are flush with cash (Duflo, Kremer & Robinson, 2009). The vouchers serve both as a reminder to buy fertilizer, and as a commitment device—because the fertilizer is purchased when the family has money, but well before it is actually needed in the field.
- An on-going experiment in India is testing the use of commitment contracts to encourage doctor visits among hypertensive patients (Bai, Handel, Miguel & Rao, 2013).
There has been little research on the design or effect of commitment devices in the RH context. Conditional cash transfer (CCT) programs have been effective in increasing the use of contraception, delaying marriage, and increasing the use of antenatal care and facility-based delivery (Ashraf et al., 2010; Baird et al., 2010). And while these may address present bias, they are not commitment devices, per se—but rather financial incentives for behavior change.