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Self-control in peer groups

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  • Battaglini, Marco
  • Benabou, Roland
  • Tirole, Jean

Abstract

People with a self-control problem often seek relief through social interactions rather than binding commitments. Thus, in self-help groups like Alcoholics Anonymous, Narcotics Anonymous etc, members are said to achieve better personal outcomes by mainly sharing their experiences. In other settings, however, peer influences can severely aggravate individual tendencies towards immediate gratification, as is often the case with interactions among schoolmates or neighborhood youths. Bringing together the issues of self-control and peer effects, we study how observing the behaviour of others affects individuals’ ability to resist their own impulses towards short-run gratification. We show how these purely informational spillovers can give rise to multiple equilibria, where agents’ choices of self-restraint or self-indulgence are mutually reinforcing. More generally, we identify conditions on agents’ initial self-confidence, confidence in others, and degree of correlation that uniquely lead to either a ‘good news’ equilibrium where social interactions improve self-discipline, a ‘bad news equilibrium’ where they damage it, or to both. We also conduct a welfare analysis to determine when group membership is preferable to, or worse than, isolation. Individuals will generally find groups useful for self-control only if they have at least a minimal level of confidence in their own and their peers’ ability to resist temptation. At the same time, having a partner who is ‘too perfect’ is no better than being alone, and therefore often less desirable than being matched to someone more like oneself. Our Paper thus provides a psychologically grounded theory of endogenous peer effects, as well as of the importance of group morale.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 123 (2005)
Issue (Month): 2 (August)
Pages: 105-134

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Handle: RePEc:eee:jetheo:v:123:y:2005:i:2:p:105-134

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Web page: http://www.elsevier.com/locate/inca/622869

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References

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Citations

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Cited by:
  1. Buechel, Berno & Mechtenberg, Lydia & Petersen, Julia, 2014. "Peer Effects and Students’ Self-Control," MPRA Paper 53658, University Library of Munich, Germany.
  2. repec:hal:journl:halshs-00344780 is not listed on IDEAS
  3. Ryota Nakamura & Marc Suhrcke & Daniel John Zizzo, 2014. "A Triple Test for Behavioral Economics Models and Public Health Policy," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 14-01, School of Economics, University of East Anglia, Norwich, UK..
  4. Bénabou, Roland & Tirole, Jean, 2002. "Willpower and Personal Rules," CEPR Discussion Papers 3143, C.E.P.R. Discussion Papers.
  5. Gerd Muehlheusser & Andreas Roider, 2004. "Black Sheep and Walls of Silence," Diskussionsschriften dp0410, Universitaet Bern, Departement Volkswirtschaft.
  6. Kfir Eliaz & Debraj Ray, 2004. "Choice Shifts in Groups," Econometric Society 2004 North American Summer Meetings 205, Econometric Society.
  7. Isabelle Brocas & Juan D Carrillo, 2007. "The Brain as a Hierarchical Organization," Levine's Bibliography 122247000000001587, UCLA Department of Economics.
  8. Lillemo, Shuling Chen, 2014. "Measuring the effect of procrastination and environmental awareness on households' energy-saving behaviours: An empirical approach," Energy Policy, Elsevier, vol. 66(C), pages 249-256.
  9. Burke & Heiland, 2007. "Social Dynamics Of Obesity," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 571-591, 07.
  10. Kylymnyuk, Dmytro & Wagner, Alexander K., 2012. "Commitment through risk," Economics Letters, Elsevier, vol. 116(3), pages 295-297.
  11. S. Nageeb Ali, 2009. "Learning Self-Control," Levine's Working Paper Archive 814577000000000384, David K. Levine.
  12. Alberto Bisin & Kyle Hyndman, 2014. "Present-Bias, Procrastination and Deadlines in a Field Experiment," NBER Working Papers 19874, National Bureau of Economic Research, Inc.
  13. Nir, A., 2004. "Relationships as Commitment Devices: Strategic Silence," Discussion Paper 2004-49, Tilburg University, Center for Economic Research.
  14. Berg, Nathan & Kim, Jeong-Yoo, 2010. "Demand for Self Control: A model of Consumer Response to Programs and Products that Moderate Consumption," MPRA Paper 26593, University Library of Munich, Germany.

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