Naïve and Capricious: Stumbling into the Ring of Self-Control Conflict
Published in Journal of Economic Psychology 34(1): 8-19
48 Pages Posted: 3 Sep 2011 Last revised: 28 Nov 2016
Date Written: September 1, 2011
Abstract
We model self-control conflict as a stochastic struggle of an agent against a visceral influence, which impels the agent to act sub-optimally. The agent holds costly pre-commitment technology to avoid the conflict altogether and may decide whether to procure pre-commitment or to confront the visceral influence. We examine naïve expectations for the strength of the visceral influence; underestimating the visceral influence may lead the agent to exaggerate the expected utility of resisting temptation, and so mistakenly forego pre-commitment. Our analysis reveals conditions under which higher willpower – and lower visceral influence – reduces welfare. We further demonstrate that lowering risk aversion could reduce welfare. The aforementioned results call into question certain policy measures aimed at helping people improve their own behavior.
Keywords: self-control, temptation, inter-temporal choice, pre-commitment
JEL Classification: D01, D03, D69, D90
Suggested Citation: Suggested Citation
Published in Journal of Economic Psychology 34(1): 8-19, ESMT Working Paper No. 11-09, Available at SSRN: https://ssrn.com/abstract=1921203 or http://dx.doi.org/10.2139/ssrn.1921203