Indonesia | Economics

Thursday, January 03, 2008

A stickky dilemma

If I were to ask this company to help out with my new year resolution, should I:
a) Offer myself or a third-party to verify my compliance?
b) Choose a cause that I like or dislike to receive my money should I balk on my commitment?

Tim Harford, who plans to send his penalty payments to charity, thinks he himself is an honest enough verifier because he will not lie to cheat a cause that he supports. But by choosing cause that he likes, there is an incentive to rationalise away the failure to comply.

Alternatively, I can choose a cause that I dislike. But here, having myself as a verifier probably isn't going to work for the opposite reason -- I can now rationalise away my lying: i.e, to cheat a cause that I hate.

If I were to do this, I'd probably try to maximise my incentive to comply and minimise the incentive to lie by choosing a cause that I dislike and a third-party verifier. Now, all I need is a new year resolution worthy of the hassle.

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