A Dual Self Model of Impulse Control

35 Pages Posted: 13 Nov 2004

See all articles by Drew Fudenberg

Drew Fudenberg

Massachusetts Institute of Technology (MIT)

David K. Levine

Washington University in St. Louis - Department of Economics; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2004

Abstract

We propose that a simple "dual-self" model gives a unified explanation for several empirical regularities, including the apparent time-inconsistency that has motivated models of hyperbolic discounting and Rabin's paradox of risk aversion in the large and small. The model also implies that self-control costs imply excess delay, as in the O'Donoghue and Rabin models of hyperbolic utility, and it explains experimental evidence that increased cognitive load makes temptations harder to resist. Finally, the reduced form of the base version of our model is consistent with the Gul-Pesendorfer axioms.

Note: An updated version of this paper can be found at: http://ssrn.com/abstract=888752

Suggested Citation

Fudenberg, Drew and Levine, David K., A Dual Self Model of Impulse Control (November 2004). Harvard Institute of Economic Research Discussion Paper No. 2049. Available at SSRN: https://ssrn.com/abstract=617522 or http://dx.doi.org/10.2139/ssrn.617522

Drew Fudenberg (Contact Author)

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David K. Levine

Washington University in St. Louis - Department of Economics ( email )

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European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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