Save More Today or Tomorrow: The Role of Urgency in Pre-commitment Design

Abstract

To encourage farsighted behaviors, past research suggests that marketers may be wise to invite consumers to pre-commit to adopt them “later”. However, we propose that people will draw different inferences from different types of pre-commitment offers, and that certain pre- commitment offers may even reduce the appeal of farsighted behaviors. Specifically, we theorize that simultaneously offering consumers the opportunity to start a farsighted activity now or later (i.e., offering “simultaneous pre-commitment”) may signal that the activity is not urgently recommended; however, offering consumers the opportunity to begin that activity immediately and then, only if they decline, inviting them to instead begin later (i.e., offering “sequential pre- commitment”) may signal just the opposite. In a multi-site field experiment (N=5,196), we find that simultaneously giving consumers the chance to start saving now or later reduced retirement savings. In two pre-registered lab studies (N=5,080), we show that simultaneous pre-commitment leads people to infer that taking action is not urgently recommended, which decreases adoption. Importantly, we document that offering sequential pre-commitment increases inferred urgency, thus boosting adoption. Together, this research advances knowledge about the limits and potential of pre-commitment.

Keywords: pre-commitment, inference making, farsighted decisions, choice architecture, field experiment

JEL Classification: D14, D12, D03, D02, D91, M31