Advanced Search
MyIDEAS: Login to save this paper or follow this series

Learning Self-Control

Contents:

Author Info

  • S. Nageeb Ali

Abstract

This article examines how a decision maker who is only partially aware of his temptations learns about them over time. In facing temptations, individuals use their experience to forecast future self-control problems and choose the appropriate level of commitment. I demonstrate that rational learning can be perpetually partial and need not result in full sophistication. The main result of this article characterizes necessary and sufficient conditions for learning to converge to full sophistication. I apply this result to a consumption-savings environment in which a decision maker is tempted by present bias and establish a learning-theoretic justification for assuming sophistication in this setting. "An individual who finds himself continuously repudiating his past plans may learn to distrust his future behavior, and may do something about it." -- Copyright 2011, Oxford University Press.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.dklevine.com/archive/refs4814577000000000384.pdf
Download Restriction: no

Bibliographic Info

Paper provided by David K. Levine in its series Levine's Working Paper Archive with number 814577000000000384.

as in new window
Length:
Date of creation: 10 Nov 2009
Date of revision:
Handle: RePEc:cla:levarc:814577000000000384

Contact details of provider:
Web page: http://www.dklevine.com/

Related research

Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Aghion, Philippe, et al, 1991. "Optimal Learning by Experimentation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(4), pages 621-54, July.
  2. Dekel, Eddie & Fudenberg, Drew & Levine, David K., 1999. "Payoff Information and Self-Confirming Equilibrium," Journal of Economic Theory, Elsevier, Elsevier, vol. 89(2), pages 165-185, December.
  3. Manuel Amador & Iván Werning & George-Marios Angeletos, 2006. "Commitment vs. Flexibility," Econometrica, Econometric Society, Econometric Society, vol. 74(2), pages 365-396, 03.
  4. Athanasios Orphanides & David Zervos, 1992. "Rational addiction with learning and regret," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 216, Board of Governors of the Federal Reserve System (U.S.).
  5. Ignacio Esponda, 2008. "Behavioral Equilibrium in Economies with Adverse Selection," American Economic Review, American Economic Association, American Economic Association, vol. 98(4), pages 1269-91, September.
  6. Olivier Compte & Andrew Postlewaite, 2004. "Confidence-Enhanced Performance," American Economic Review, American Economic Association, American Economic Association, vol. 94(5), pages 1536-1557, December.
  7. Per Krusell & Anthony A. Smith, Jr., . "Consumption-Savings Decisions with Quasi-Geometric Discounting," GSIA Working Papers, Carnegie Mellon University, Tepper School of Business 2001-05, Carnegie Mellon University, Tepper School of Business.
  8. Markus K. Brunnermeier & Jonathan A. Parker, 2005. "Optimal Expectations," American Economic Review, American Economic Association, American Economic Association, vol. 95(4), pages 1092-1118, September.
  9. John Ameriks & Andrew Caplin & John Leahy, 2002. "Wealth Accumulation and the Propensity to Plan," NBER Working Papers 8920, National Bureau of Economic Research, Inc.
  10. Eddie Dekel & Drew Fudenberg & David K Levine, 2002. "Learning to Play Bayesian Games," Levine's Working Paper Archive 625018000000000151, David K. Levine.
  11. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, Econometric Society, vol. 69(6), pages 1403-1435, November.
  12. Battaglini, Marco & Bénabou, Roland & Tirole, Jean, 2003. "Self-Control in Peer Groups," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 189, Institut d'Économie Industrielle (IDEI), Toulouse.
  13. Aghion, P. & Bolton, P. & Harris, C. & Jullien, B., 1990. "Optimal Learning By Experimentation," DELTA Working Papers, DELTA (Ecole normale supérieure) 90-10, DELTA (Ecole normale supérieure).
  14. Drew Fudenberg & David K Levine, 2009. "Risk, Delay, and Convex Self-Control Costs," Levine's Working Paper Archive 843644000000000332, David K. Levine.
  15. Daron Acemoglu & Victor Chernozhukov & Muhamet Yildiz, 2009. "Fragility of Asymptotic Agreement under Bayesian Learning," Levine's Working Paper Archive 814577000000000139, David K. Levine.
  16. Kahneman, Daniel & Wakker, Peter P & Sarin, Rakesh, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(2), pages 375-405, May.
  17. S. Dellavigna., 2011. "Psychology and Economics: Evidence from the Field," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
  18. Kalyan Chatterjee & R. Vijay Krishna, 2009. "A "Dual Self" Representation for Stochastic Temptation," American Economic Journal: Microeconomics, American Economic Association, American Economic Association, vol. 1(2), pages 148-67, August.
  19. Viscusi, W Kip, 1990. "Do Smokers Underestimate Risks?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(6), pages 1253-69, December.
  20. H. M. Shefrin & Richard Thaler, 1977. "An Economic Theory of Self-Control," NBER Working Papers 0208, National Bureau of Economic Research, Inc.
  21. Gine, Xavier & Karlan, Dean & Zinman, Jonathan, 2009. "Put your money where your butt is : a commitment contract for smoking cessation," Policy Research Working Paper Series 4985, The World Bank.
  22. Isabelle Brocas & Juan D. Carrillo, 2008. "The Brain as a Hierarchical Organization," American Economic Review, American Economic Association, American Economic Association, vol. 98(4), pages 1312-46, September.
  23. Drew Fudenberg, 2006. "Advancing Beyond Advances in Behavioral Economics," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 694-711, September.
  24. Brian C. Cadena & Benjamin J. Keys, 2013. "Can Self-Control Explain Avoiding Free Money? Evidence from Interest-Free Student Loans," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1117-1129, October.
  25. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  26. Ernesto Dal Bó & Marko Terviö, 2008. "Self-Esteem, Moral Capital, and Wrongdoing," NBER Working Papers 14508, National Bureau of Economic Research, Inc.
  27. Fudenberg, D. & Levine, D.K., 1991. "Self-Confirming Equilibrium ," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 581, Massachusetts Institute of Technology (MIT), Department of Economics.
  28. O'Donoghue, Ted & Rabin, Matthew, 2000. "Choice and Procrastination," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt5r26k54p, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  29. Ruqu Wang, 2000. "The Optimal Consumption and the Quitting of Harmful Addictive Goods," Econometric Society World Congress 2000 Contributed Papers 1122, Econometric Society.
  30. Fudenberg, Drew, 2006. "Advancing Beyond "Advances in Behavioral Economics"," Scholarly Articles 3208222, Harvard University Department of Economics.
  31. Benabou, Roland & Pycia, Marek, 2002. "Dynamic inconsistency and self-control: a planner-doer interpretation," Economics Letters, Elsevier, Elsevier, vol. 77(3), pages 419-424, November.
  32. Ariel Rubinstein & Asher Wolinsky, 1991. "Rationalizable Conjectural Equilibrium: Between Nash and Rationalizability," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 933, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  33. Robert J. Barro, 1999. "Ramsey Meets Laibson In The Neoclassical Growth Model," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1125-1152, November.
  34. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, Econometric Society, vol. 77(3), pages 909-931, 05.
  35. David I. Laibson & Andrea Repetto & Jeremy Tobacman, 1998. "Self-Control and Saving for Retirement," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 91-196.
  36. B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, American Economic Association, vol. 94(5), pages 1558-1590, December.
  37. Kreps, David M, 1979. "A Representation Theorem for "Preference for Flexibility"," Econometrica, Econometric Society, Econometric Society, vol. 47(3), pages 565-77, May.
  38. Carrillo, Juan D & Mariotti, Thomas, 2000. "Strategic Ignorance as a Self-Disciplining Device," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(3), pages 529-44, July.
  39. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, American Economic Association, vol. 96(3), pages 694-719, June.
  40. John Ameriks & Andrew Caplin & John Leahy & Tom Tyler, 2007. "Measuring Self-Control Problems," American Economic Review, American Economic Association, American Economic Association, vol. 97(3), pages 966-972, June.
  41. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, INFORMS, vol. 17(1), pages 4-28.
  42. Benhabib, Jess & Bisin, Alberto, 2005. "Modeling internal commitment mechanisms and self-control: A neuroeconomics approach to consumption-saving decisions," Games and Economic Behavior, Elsevier, Elsevier, vol. 52(2), pages 460-492, August.
  43. Kivetz, Ran & Simonson, Itamar, 2002. " Self-Control for the Righteous: Toward a Theory of Precommitment to Indulgence," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 29(2), pages 199-217, September.
  44. Rothschild, Michael, 1974. "A two-armed bandit theory of market pricing," Journal of Economic Theory, Elsevier, Elsevier, vol. 9(2), pages 185-202, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Serena Ng & Jonathan H. Wright, 2013. "Facts and Challenges from the Great Recession for Forecasting and Macroeconomic Modeling," Journal of Economic Literature, American Economic Association, vol. 51(4), pages 1120-54, December.
  2. 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), School of Economics, University of East Anglia, Norwich, UK. 14-01, School of Economics, University of East Anglia, Norwich, UK..
  3. Matthew Harding & Alice Hsiaw, 2014. "Goal Setting and Energy Conservation," Working Papers, College of the Holy Cross, Department of Economics 1403, College of the Holy Cross, Department of Economics, revised Aug 2014.
  4. Buechel, Berno & Mechtenberg, Lydia & Petersen, Julia, 2014. "Peer Effects and Students’ Self-Control," MPRA Paper 53658, University Library of Munich, Germany.
  5. Dan Acland & Matthew Levy, 2013. "Naivete, projection bias, and habit formation in gym attendance," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 46827, London School of Economics and Political Science, LSE Library.
  6. Parsons, Christopher A. & Van Wesep, Edward D., 2013. "The timing of pay," Journal of Financial Economics, Elsevier, Elsevier, vol. 109(2), pages 373-397.
  7. Luca Benati & Thomas A Lubik, 2012. "Sales, Inventories, and Real Interest Rates: A Century of Stylized Facts," CAMA Working Papers 2012-19, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  8. Alos Ferrer, Carlos, 2013. "Think, but Not Too Much: A Dual-Process Model of Willpower and Self-Control," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80019, Verein für Socialpolitik / German Economic Association.
  9. Paul Heidhues & Botond Koszegi, 2010. "Exploiting Naivete about Self-Control in the Credit Market," American Economic Review, American Economic Association, American Economic Association, vol. 100(5), pages 2279-2303, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cla:levarc:814577000000000384. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David K. Levine).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.