Monday, February 14, 2011

Commitment

What should you do to romance the economist in your life on Valentine's Day? Make a credible commitment. That is, credibly bind yourself to do something you wouldn't have the short-term incentives to do, but will make your partner better off. It is the best way to show an economist how much you care.

Just in time for Valentine's Day, William Spaniel has a great video on the game theory of commitment problems.



There is no reference to Valentine's Day in the video, but we do learn about an interesting encounter that Spaniel had with a Texas Ranger (and, not a baseball player or Chuck Norris).

For more reading on commitment problems, check out my previous post on when to burn a bridge, or how economics can wake you up. Have a great day celebrating your commitments!

1 comment:

  1. Irony: I was on my way to see the Texas Rangers play that day.

    ReplyDelete

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