A Dual Self Model of Impulse Control
59 Pages Posted: 7 Mar 2006
Date Written: March 2006
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 axions.
Note: A previous version of this paper can be found at: http://ssrn.com/abstract=617522
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