48 Pages Posted: 15 Feb 2001
Date Written: October 1977
Although many economists, most notably Strotz, have discussed dynamic inconsistency and precommitment, none have dealt directly with the essence of the problem: self-control. This paper attempts to fill that gap by modeling man as an organization. The Strotz model is recast to include the control features missing in his formulation. The organizational analogy permits us to draw on the theory of agency. We thus relate the individual's control problems with those that exist in agency relationships.
Suggested Citation: Suggested Citation
Shefrin, Hersh and Thaler, Richard H., An Economic Theory of Self-Control (October 1977). NBER Working Paper No. w0208. Available at SSRN: https://ssrn.com/abstract=260400