Precommitment

[2] Precommitment has been studied as a bargaining strategy in which agents bind themselves to one course of action in order to enhance the credibility of present threats.

Some scholars have proposed that collective political groups may also engage in precommitment by adopting constitutions that limit the scope of future legislation.

[3] In two unrelated articles, both published in 1956, Thomas Schelling and R.H. Strotz introduced the concept of precommitment to the study of strategic bargaining and consumer behavior, respectively.

Schelling later included an expanded version of this essay in his 1960 work The Strategy of Conflict,[4] explaining precommitment as part of his deterrence theory, where it is said to influence other parties in a bargaining situation.

[6] Schelling argued that a negotiator may voluntarily limit the options available to them in the future in order to make his current offer or threat more credible.

[7] For example, a general may burn the bridges behind his army to preclude the possibility of retreat, thereby increasing the credibility of his threat to stand and fight.

The establishment of central banks, he argues, can be interpreted as an act of precommitment on the part of an electorate seeking to preempt the impulse to meddle with interest rates.