Exact(3)
The strategic withdrawal option introduces an incentive-compatibility problem that turns the problem of designing deposit contracts into a non-standard, non-convex optimal control problem.
[Focus Group 7, Younger, Less Affluent] Where the incentive format was discussed most participants expressed a preference for reward schemes rather than penalties or deposit contracts.
This includes deposit contracts where individuals deposit their own money in advance and receive this back if they successfully change their behaviour, but forfeit the money if not [ 5].
Similar(51)
However, banks can prevent them by designing the deposit contract appropriately.
Next, we compare the effectiveness of both deposit contract and lottery interventions as a function of participant demographic characteristics.
First, examining data from the deposit contract treatments in greater depth, we investigate factors affecting deposit frequency and size, and discuss possible ways of increasing deposits.
The efficient outcome of a deposit contract model is uniquely implementable with relatively partially honest agents, while it is never uniquely implementable only with materially self-interest agents.
We show that information-based bank runs may be inefficient because the deposit contract designed to provide liquidity induces depositors to have excessive incentives to withdraw.
Deposit contract incentive systems give participants the opportunity to put their money down toward losing weight, which they forfeit if they fail to lose weight; lottery incentive systems enable participants to win money if they attain weight loss goals.
The successful bidder has to put down a 10% deposit, and contracts are exchanged immediately.
As prices for commodities go up, exchanges routinely increase the margin requirements, which function as a deposit on contracts bought and sold.
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