What is the objective of setting up a commitment contract

Reference no: EM133659724

Problem: Take a look at Stickk's business model. Consider an example of the game that your current self would be playing with your future self when you come up with a new year's resolution. Suppose your current self (The Planner) may choose between putting something at stake or not. (S)he will derive some positive happiness utility (of +100) if you achieve your goal but has to incur a small annoyance (-20) of putting something at stake. Your future self (The Procrastinator) may choose between taking action towards your goal or doing something else. Taking action is annoying (costs -20) and (s)he will derive happiness utility of (+100) from doing something else. However, if (s)he does something else and there is something at stake, (s)he will derive utility x. What value should x have for (stake, take action) to be the subgame perfect equilibrium? What is the objective of setting up a commitment contract?

Reference no: EM133659724

Questions Cloud

How does filite fernadez armesto link the green revolution : How does Filite fernadez armesto link "Green Revolution" and modern preservation techniques back to, calling them "the last phase of the Neolithic revolution"?

What happens to the equilibrium price and quantity : Consider the market for grape jelly, an inferior good. Assume that the income of families rises. What happens to the equilibrium price and quantity?

What can be done to deal with the new generation of robber : What can be done to deal with the new generation of robber barons controls huge sections of US economy, corporate profits, stagnant wages resulting in workers?

Elements of their organizations reflect socialist ideas : Provide an overview of the community which elements of their organizations reflect socialist ideas, and what impact there community has/ continues to have?

What is the objective of setting up a commitment contract : What value should x have for (stake, take action) to be the subgame perfect equilibrium? What is the objective of setting up a commitment contract?

What coverage is she entitled to under cipf : Angelina has the following accounts with an IIROC-member firm: i) $1.25M in a non-registered account; ii) $700,000 in an RRSP. What coverage is she entitled

How can frontier explain concept of productive efficiency : What is production possibilities frontier? Why it typically drawn as curve rather than straight line? How can frontier explain concept of productive efficiency?

Description of tenochtitlan : In this description of Tenochtitlan, which would have been the largest and grandest city in the Americas in its time.

Engineering advised that the knife-gate valve : Jerry is certain that a great way for CVC to improve profitability is to expand its product line. He believes a new knife-gate valve has a very promising future

User Account

All Pages