The book discusses credible commitment problems, and potential solutions to thes

Question

The book discusses credible commitment problems, and potential solutions to these issues. Which of these solutions do you think is the best for state to state commitment problems? What about inter-personal commitment problems? Would any of these work, and be effective, in those situations?

In my point of view, in a state to state commitment problem, the best solution would be the use of institutions that alter the distribution of power.

Can you make this more specific and this is a short answer question.

Explanation / Answer

The institutions of society play can play an important role in commitment problems.The socio-economic and cultural institutions of the society play an important part in developing commitment devices that are optimal for both state and the individuals. When the power for deciding for commitments is distributed among these institutions of societies then the payoffs are changed, this ensures that societies achieve their optimal and the cost and benefits are inter-dependent. The principle goes at interpersonal level. Individuals goes for those commitment that are largely accepted by the institutions of their society. This would ensure their optimal development although some of their self interests are curtailed.

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