Asked by
Rachel Dumitru
on Nov 25, 2024Verified
Salary smoothing, automatic payroll deductions, and early withdrawal penalties are all examples of
A) mechanisms imposed by companies to extract more from their workers and customers.
B) policies that do not fundamentally alter decisions because they do not change the benefits or costs of an action.
C) precommitments.
D) hardwired heuristics.
Precommitments
Commitments made in advance to a specific course of action, often used as a strategy to restrain one's future actions.
Salary Smoothing
The practice of moderating the fluctuations in an employee's pay through methods that stabilize income, such as averaging earnings over time or providing benefits that reduce the impact of income variability.
Payroll Deductions
The amounts withheld from an employee's payroll for taxes, insurance premiums, benefits, and other similar expenses.
- Understand precommitments as a strategy to address time inconsistency and self-control problems.
Verified Answer
IQ
Learning Objectives
- Understand precommitments as a strategy to address time inconsistency and self-control problems.