Self Control in Peer Groups

47 Pages Posted: 7 Feb 2002

See all articles by Marco Battaglini

Marco Battaglini

Princeton University - Department of Economics; Centre for Economic Policy Research (CEPR)

Roland Bénabou

Princeton University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI); University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ); Centre for Economic Policy Research (CEPR)

Date Written: January 2002

Abstract

People with a self-control problem often seek relief through social interactions rather than binding commitments. Thus, in self-help groups like Alcoholics Anonymous, Narcotics Anonymous etc, members are said to achieve better personal outcomes by mainly sharing their experiences. In other settings, however, peer influences can severely aggravate individual tendencies towards immediate gratification, as is often the case with interactions among schoolmates or neighborhood youths. Bringing together the issues of self-control and peer effects, we study how observing the behaviour of others affects individuals' ability to resist their own impulses towards short-run gratification. We show how these purely informational spillovers can give rise to multiple equilibria, where agents' choices of self-restraint or self-indulgence are mutually reinforcing. More generally, we identify conditions on agents' initial self-confidence, confidence in others, and degree of correlation that uniquely lead to either a 'good news' equilibrium where social interactions improve self-discipline, a 'bad news equilibrium' where they damage it, or to both. We also conduct a welfare analysis to determine when group membership is preferable to, or worse than, isolation. Individuals will generally find groups useful for self-control only if they have at least a minimal level of confidence in their own and their peers' ability to resist temptation. At the same time, having a partner who is 'too perfect' is no better than being alone, and therefore often less desirable than being matched to someone more like oneself. Our Paper thus provides a psychologically grounded theory of endogenous peer effects, as well as of the importance of group morale.

Keywords: Peer effects, social interactions, clubs, self-control, willpower, addiction, time-inconsistency, memory, psychology

JEL Classification: C72, D71, D82, D91, J24

Suggested Citation

Battaglini, Marco and Bénabou, Roland and Tirole, Jean, Self Control in Peer Groups (January 2002). Available at SSRN: https://ssrn.com/abstract=298448

Marco Battaglini (Contact Author)

Princeton University - Department of Economics ( email )

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Roland Bénabou

Princeton University - Department of Economics ( email )

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Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

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