An Economic Theory of Self-Control

48 Pages Posted: 15 Feb 2001  

Hersh Shefrin

Santa Clara University - Leavey School of Business

Richard H. Thaler

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: October 1977

Abstract

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

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

Hersh Shefrin (Contact Author)

Santa Clara University - Leavey School of Business ( email )

Dept. of Finance
Santa Clara, CA 95053
United States
408-554-6893 (Phone)
408-554-4029 (Fax)

Richard H. Thaler

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5208 (Phone)
773-702-0458 (Fax)

Paper statistics

Downloads
353
Rank
66,974
Abstract Views
4,411