Commitment Problems

A police officer pulls over your vehicle and wants to conduct a “quick” search. Should you let him?

Takeaway Points

  1. Actors would like to commit to actions ahead of time to induce cooperative behavior.
  2. The inability to credibly commit to such actions might lead to a credible commitment problem. The first party takes an uncooperative action because it knows the second party will take an uncooperative action later.
  3. Commitment problems lead to outcomes that are worse for both parties than another outcome.