Using Commitment Contracts to Further Ex Ante Freedoms: The Twin Problems of Substitution and Ego Depletion
For an economist to think about the project of furthering individual freedom, it is natural to think about the unavoidable tension between ex ante freedom. When should individuals have the right to restrict their future rights?
I frequently ask my contracts students whether the spousal notification ruling in Casey should just be a default rule. By this, I mean whether married woman have the option to contract for a duty to notify her spouse that she is pregnant and plans to have an abortion (or in the alternative certify under oath that she believes such disclosure will cause her spouse or someone else to inflict bodily injury on her). Does the constitution prohibit enforcement of such a contract, even if a breach carries with it minimal liquidated damages? Many of my students argue that enforcement of such a contract would unfairly burden women’s procreative freedom. And from an ex post perspective, the contract — like all contracts — restricts or burdens choice. But from an ex ante perspective, giving women the option to enter into these contracts expands their freedom. By giving women a way to more credibly commit to notification, you are enhancing their ability to bargain for the marriage structure that best suits their relationship with their potential husbands.
As a pedagogical provocateur, I often chide the students who stubbornly cling to the ex post perspective. Why aren’t they “pro-choice” when it comes to contracting? Or more simply, why do they hate freedom?
There are many, many problems with taking a naïve embrace of simply maximizing ex ante freedom. In this essay, I focus on just two related problems with a full-throated embrace of the ex ante perspective – the twin problems of substitution and ego depletion. I am not a neutral commentator on these issues. I am a co-founder of a for-profit commitment service, www.stickK.com, where individuals enter into binding contracts putting money at risk if they fail to meet their goals. [In fact, it might be possible for spouses to implement a Casey-like commitment using the stickK platform.] So even though this essay is centrally about the limits of the ex ante perspective, reasonable readers should worry that I still have my thumb on the scale in favor making enforceable commitments.