Microeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 5

At the website stickK.com (started by one of the authors of this book), you can sign up for a contract in which you promise to meet certain weight-loss targets each week, and forfeit money that you put up as stakes if you fail to meet those targets. Describe why a rational person might be willing to pay money if he does not lose weight, and how this constitutes a commitment strategy.