According to Behavioral Economists, Precommitments

question 310

Multiple Choice

According to behavioral economists, precommitments

• A)help people overcome their self-control problems caused by time inconsistency.
• B)do not fundamentally alter decisions because they do not change the benefits or costs of a particular action.
• C)end up being more costly, as people regularly violate them and incur penalties.
• D)overcome cognitive biases introduced by brain System 2.

---

Definitions:

Private Production

The creation of goods or services by businesses that are owned by individuals or groups not affiliated with the government.

Redistribution of Income

Government policies or mechanisms aimed at adjusting the distribution of wealth among a population.

Well-organized Interest Groups

Organizations that coordinate the efforts of members to advocate or lobby for shared interests and goals in the policy-making process.

Rent-seeking Activities

Rent-seeking activities involve individuals or businesses trying to increase their share of existing wealth without creating new wealth, often through manipulation or exploitation of the economic environment.