An Economic Theory of Self-Control
Santa Clara University - Leavey School of Business
Richard H. Thaler
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
NBER Working Paper No. w0208
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.
Number of Pages in PDF File: 48
Date posted: February 15, 2001