The first economics seminar this year is by our own Professor Karna Basu, who will present his paper “Commitment as Extortion” on Wednesday October 21 at 1.30 pm.

The zoom link for the event is: https://huntercollege.zoom.us/j/82691744150

Abstract:
A hyperbolic discounter’s valuation of commitment depends not just on
non-commitment (“autarky”) consumption, but also on anticipated future
commitment contracts. Consequently, monopoly provision of commitment
could make the consumer strictly better or worse off than before. If
autarky consumption is sufficiently decreasing over time, commitment is
beneficial, even when the monopolist can price discriminate. If autarky
consumption is sufficiently increasing, commitment is harmful. Here, the
consumer dislikes access to commitment, but adopts it as a response to
the threat of future adoption. Commitment could similarly help or hurt
her even if she has access to competitive credit markets in autarky.