#econtwitter, I have a story to tell you about misusing a behavioral econ commitment device to make classical threats. The year is 2011, and I'm running a university debate tournament in Ireland with 180 teams.
Each round, these teams are matched into groups of 4 using an arcane process known as 'the Tab'. The Tab takes about 20 minutes to do. If more than a few teams go missing, we have to make a new matching without them, burning another 20 minutes.
If the late teams arrive the Tab is being re-done, then it's faster for the organizers to use the original matching instead of ejecting the late teams. So any team can safely be 20 minutes later than the rest without being left out of the round!
Of course, this whole process unravels, and tournaments can run hours behind schedule. In 2011, I vow to fix this.
@deankarlan has a website, http://www.stickk.com , used to help time-inconsistent humans make commitment devices. You put in your credit card details, and choose a goal, and anti-charity, and a monitor.
If your monitor reports that you don't reach your goal, then your money is sent straight to your anti-charity. Of course, this same structure can be used to make credible threats!
Using stickk, I make a public commitment that if any team is more than 5 minutes late, I will run the round without them, even if doing so delays the tournament more than letting them in. I wager $500 of my own money, that will go the NRA if I don't follow through.
For a monitor, I nominate one of my friends, Sam, whom I can count on to enforce the rules with conviction. Now the test: Does game theory work? Will a rowdy crowd of hundreds of college debaters do backward induction?
At first, some laughter. Someone jokes, "hey, we can force Shengwu to donate to the NRA by being late." But then it dawns on them that I can always avoid making a donation by ejecting them from the round.
Shockingly, it works! The first day, every round runs on time. The second day, every round runs on time. It's going like clockwork!
But are off-path beliefs really justified, if nobody ever sees what happens? Well, on the third day, someone decides to see what will happen off the path-of-play. 5 minutes after the scheduled time, one team is missing.
I've started my stopwatch. The whole auditorium knows it. Two minutes after the cutoff, the team bursts in, shouting "we're here, don't start without us!"
I glance at my stopwatch. I look at the team, harried from the sprint. I look at Sam, in the front row. His grin from ear to ear. That's $500 from my credit card that he can send to the NRA with a click of a button.
"I'm so sorry! But you're not competing in this round." Threat becomes punishment. From then on, every round runs like clockwork.
Moral of the story: If you're a classical economic agent, and searching for a good way to make credible threats, I wholeheartedly recommend http://www.stickk.com  . ⭐️⭐️⭐️⭐️⭐️ would threaten again.
You can follow @ShengwuLi.
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