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How Many Paychecks? An Example of a Self-Imposed Constraint

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Author Info
Archibald, Robert B
Abstract

Many faculty members prefer to receive their salary in twenty-four equal payments over the entire year as opposed to receiving the salary sooner in eighteen equal payments over the academic year. The author considers two explanations for this choice: (1) it is chosen to eliminate transactions costs associated with administering a similar plan oneself or (2) it is chosen as a self-imposed constraint to insure against one's own potential imprudent behavior. The paper provides a test that clearly supports the second alternative. Copyright 1994 by Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Economic Inquiry.

Volume (Year): 32 (1994)
Issue (Month): 4 (October)
Pages: 696-702
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Handle: RePEc:oup:ecinqu:v:32:y:1994:i:4:p:696-702

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