Behavioral Economics Time Consistency and Commitment Paper
ESSAY TOPIC
First, read the two references below — both are available electronically from the AUT library, and links to them can be found in the “Course Resources” section of the ECON801 Blackboard page. Based on this reading, write an essay that provides background to, and a summary of, the experimental results in the paper by Ariely and Wertenbroch.
In particular, your essay should do the following things in the following order:
- Standard economic models of (non-strategic) choice imply that a decision-maker would never choose to throw away future options, or make them more costly to access. However, real life furnishes many examples of behaviour that violates this principle. Briefly describe how behavioural economics can rationalise such behaviour. Your explanation should include a discussion of the concepts of “time consistency” and “commitment”.
- What hypotheses do Ariely and Wertenbroch test?
- How do they test them?
- What results do they obtain and what conclusions to they draw from these results?
As a rough guide, you should expect to devote similar space to each of parts (1), (3) and (4), with somewhat less space for (2). Avoid allocating excessive space to (1) — the main focus is the Ariely and Wertenbroch paper, so (1) should give just enough background for the reader to understand their hypotheses.
References:
Edward Cartright (2018): Behavioral Economics. Routledge, London. Read sections 4.1, 4.2 (excluding 4.2.3) and 10.3.
Dan Ariely and Klaus Wertenbroch (2002): “Procrastination, Deadlines, and Performance: Self-Control by Precommitment”. Psychological Science, 13(3), 219-224.
This is an exercise in written communication. There is no “right answer”; nor am I assessing the number of pages you have written. Your first duty is to ensure that your essay has a coherent structure, with clear, logical analysis, and demonstrates good understanding of relevant economic concepts. A good essay should be both informative and easy to read — the reader should not have to re-read sentences or paragraphs to garner your meaning — and a really good one will be a pleasure to read. You should plan to write several drafts, refining your exposition with each revision. The best way to see if you are on track is to have someone else read your draft and give feedback: Where did they struggle to follow your meaning? Were they left with unanswered questions? Remember that you can’t lose marks for something you don’t say. If you’re not 100% sure of what you are saying and why you are saying it, then leave it out. You will not earn any marks for being right unless you can convince me that you know why you are right.
Marks will be allocated as follows:
- Exhibits clear, logical and coherent exposition [15 marks]
- Demonstrates good understanding of relevant economic concepts [10 marks]
- Quality of the English (spelling, grammar, punctuation) [5 marks]
Make sure to carefully reference any sources that you use. All books or articles used in preparing your essay should appear in a list of “References” at the end. There is no need to read beyond the two references listed above, but if you do then be sure to reference any additional sources appropriately. There are many conventions for formatting such reference lists — any standard format will be acceptable. Direct word-for-word quotations should be enclosed in quotation marks with a page reference to the original.
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