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Costly Self-Control and Limited Willpower

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Abstract

In Gul and Pesendorfer (2001), a decision-maker, when facing a choice among menus, evaluates each menu in terms of the maximum value of its normative utility net of self-control costs. This paper extends the model such that this maximum is constrained by the condition that the cost of self-control cannot exceed the decision-makerís stock of willpower w. In our characterization, choices within menus that satisfy the weak axiom of revealed preferences (WARP) reveal a constant trade-off between normative and temptation utilities. However, it is the discontinuity of preferences over menus (along with violations of WARP for choices within menus) that reveals w (measured in units of temptation utility), allowing for a behaviorally meaningful comparative measure of self-control across individuals.

Suggested Citation

  • Simon Grant & Meng-Yu Liang & Sung-Lin Hsieh, 2018. "Costly Self-Control and Limited Willpower," IEAS Working Paper : academic research 18-A009, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    • Handle: RePEc:sin:wpaper:18-a009
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    References listed on IDEAS

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    1. Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 2009. "Temptation-Driven Preferences," Review of Economic Studies, Oxford University Press, vol. 76(3), pages 937-971.
    2. John E. Stovall, 2010. "Multiple Temptations," Econometrica, Econometric Society, vol. 78(1), pages 349-376, January.
    3. R. H. Strotz, 1955. "Myopia and Inconsistency in Dynamic Utility Maximization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(3), pages 165-180.
    4. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    5. Roland Benabou & Jean Tirole, 2004. "Willpower and Personal Rules," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 848-886, August.
    6. Kopylov, Igor, 2009. "Finite additive utility representations for preferences over menus," Journal of Economic Theory, Elsevier, vol. 144(1), pages 354-374, January.
    7. S. Nageeb Ali, 2011. "Learning Self-Control," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(2), pages 857-893.
    8. George Loewenstein, 2000. "Emotions in Economic Theory and Economic Behavior," American Economic Review, American Economic Association, vol. 90(2), pages 426-432, May.
    9. Trout Rader, 1963. "The Existence of a Utility Function to Represent Preferences," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 229-232.
    10. Igor Kopylov, 2012. "Perfectionism and Choice," Econometrica, Econometric Society, vol. 80(5), pages 1819-1843, September.
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    Cited by:

    1. Shinsuke Ikeda & Takeshi Ojima, 2021. "Tempting goods, self-control fatigue, and time preference in consumer dynamics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1171-1216, November.
    2. Ahn, David S. & Iijima, Ryota & Sarver, Todd, 2020. "Naivete about temptation and self-control: Foundations for recursive naive quasi-hyperbolic discounting," Journal of Economic Theory, Elsevier, vol. 189(C).
    3. Borah, Abhinash & Garg, Raghvi, 2023. "Reference-dependent self-control: Menu effects and behavioral choices," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 129-145.

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    More about this item

    Keywords

    : temptation; self-control; willpower;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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