── ── Mental model
Strategic Commitment
Strategic commitment converts "I might do X" into "I will do X" — not through rhetoric but by changing payoff structure so follow-through is the rational move. Schelling (1960, Nobel 2005): keeping options open undermines you when opponents predict you'll rationally back down. A commitment device removes that prediction by making retreat more expensive than execution.
How it works
Run the Credibility Audit (CAVE), then design the Commitment Device.
1. State the threat precisely: action · trigger · audience. Example: "If X enters at price Y, we match within 30 days." 2. CAVE audit (all four required or the commitment is theatrical): - C — Capability: resources to execute? - A — Action taken: irreversible action making retreat costly? - V — Visibility: can the audience observe the commitment? - E — Enforcement: third party (contract/regulator/reputation) penalizing non-execution? Weakest element = design target. 3. Cost of retreat now: if retreat is cheap, threat is not credible. Device must raise this cost until retreat is no longer dominant. 4. Choose device: sunk-cost · reputation · third-party constraint · organizational lock-in. 5. Test post-commitment game tree: re-draw payoffs — is follow-through non-dominated at execution? Stop-rule: if retreat still dominant, device is insufficient. 6. Rigidity risk: (a) scenarios where follow-through becomes irrational? (b) exit clauses for material-change? (c) does conditionality undermine deterrence?
When to use it
- someone says 'they don't believe we'll follow through', 'how do I make my threat credible?', 'how do we deter a competitor from entering?', 'we need to lock in this customer/partner', 'should we burn our bridges?', or when a stated threat or promise is being discounted by the other side
When not to use it
When the decision is routine and reversible, applying a formal method costs more than it returns.
Worked example
Amazon's Everyday Low Price Commitment (1994–present)
When Jeff Bezos launched Amazon in 1994, the company made a strategic commitment that seemed impossible to enforce: that Amazon would always offer the lowest available price. The competitive logic was clear — if customers believe Amazon is always cheapest, they do not comparison-shop, which dramatically lowers Amazon's customer acquisition cost. But the commitment requires customers and suppliers to believe it, and belief requires credibility.
Install this skill (free, MIT)
npx skills add deciqAI/knowledge-skills