Commitment to self-rewards

Arbeitspapier

Self-administered rewards are ubiquitous. They serve as incentives for personal accomplishments and are widely recommended as tools for overcoming self-control problems. However, it seems puzzling why self-rewards can work: the prospect of a reward has a motivating force only if the threat of self-denial of the reward after low performance is credible. We explain how a rational forward-looking individual may achieve commitment to self-rewards, by applying Köszegi and Rabin's (2006) model of endogenous reference point formation to a self-regulation problem. Our results show why and when self-regulation built on self-rewards can be successful and thus illustrate the power, but also the limits, of self-rewards.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4049

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Other Disciplines ; Game Theory and Bargaining Theory: General ; Economics of Contract: Theory
• Subject: Self-control ; motivation ; self-reinforcement ; time inconsistency ; reference-dependent preferences ; Motivation ; Präferenztheorie ; Willingness to pay ; Eigeninteresse ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koch, Alexander K. ; Nafziger, Julia
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/35650
• URN: urn:nbn:de:101:1-20090323189