On his Freakonomics blog, Steven D. Levitt recounts his recent trip to Vegas, where he played in a poker tournament with 10 other players. The tournament started at 5pm, and he had a flight home at midnight. He figured that was plenty of time. As long as he was able to get up from the table by 10:30 he'd make the flight.
But at 10:15, he was still in the tournament with four other players, and it didn't look like the tournament would end anytime soon unless he took drastic action. So, he announced to the other players that he was going to go "all in" (bet the maximum and never fold) for every hand until he won or went bust. He was using a "commitment device"…
… which is when someone locks himself/herself into a course he/she wouldn't otherwise want to have to follow, but as a result the person benefits.
The idea of a commitment device is counter-intuitive. How can it make you better off to lock yourself in so that you have fewer options to choose from? Aren't more choices always better than fewer? If there is no strategic interaction, more is always better, but when you are competing against someone else, limiting your options can be helpful. A classic example is an attacking army burning the bridges behind them so that they have no easy way to retreat. It commits the army to fight harder and might lead the opponent to retreat, avoiding a battle altogether.
Read Levitt's entire blog entry for more examples of the commitment device and the exciting conclusion to the poker tournament. Link
