Procrastination, Self-Imposed Deadlines and Other Commitment Devices
AbstractIn this paper we model a decision maker who must exert costly effort to complete a single task by a fixed deadline. Effort costs evolve stochastically in continuous time. The decision maker will then optimally wait to exert effort until costs are less than a given threshold, the solution to an optimal stopping time problem. We derive the solution to this model for three cases: (1) time consistent decision makers, (2) naive hyperbolic discounters and (3) sophisticated hyperbolic discounters. Sophisticated hyperbolic discounters behave as if they were time consistent but instead have a smaller reward for completing the task. We show that sophisticated decision makers will often self-impose a deadline to ensure early completion of the task. Other forms of commitment are also discussed.
Download InfoIf 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.
Bibliographic InfoPaper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 0904.
Date of creation: Mar 2009
Date of revision:
Contact details of provider:
Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Web page: http://www.smu.edu/economics
Procrastination; hyperbolic discounting; time inconsistency;
Other versions of this item:
- Bisin, Alberto & Hyndman, Kyle, 2009. "Procrastination, self-imposed deadlines and other commitment devices," MPRA Paper 16235, University Library of Munich, Germany.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-10 (All new papers)
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.:
- Maria Saez-Marti & Anna Sjögren, 2007.
"Deadlines and Distractions,"
IEW - Working Papers
347, Institute for Empirical Research in Economics - University of Zurich.
- Markus K. Brunnermeier & Filippos Papakonstantinou & Jonathan A. Parker, 2008. "An Economic Model of the Planning Fallacy," NBER Working Papers 14228, National Bureau of Economic Research, Inc.
- O'Donoghue, Ted & Rabin, Matthew, 1997.
"Doing It Now or Later,"
Department of Economics, Working Paper Series
qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Ted O'Donoghue and Matthew Rabin ., 1997. "Doing It Now or Later," Economics Working Papers 97-253, University of California at Berkeley.
- Ted O'Donoghue & Matthew Rabin, 1996. "Doing It Now or Later," Discussion Papers 1172, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Jianjun Miao, 2008.
"Option exercise with temptation,"
Springer, vol. 34(3), pages 473-501, March.
- Junjian Miao, 2005. "Option Exercise with Temptation," Boston University - Department of Economics - Working Papers Series WP2005-007, Boston University - Department of Economics.
- Jianjun Miao, 2004. "Option Exercise with Temptation," Microeconomics 0409002, EconWPA.
- W. Pesendorfer & F. Gul, 1999.
"Temptation and Self-Control,"
Princeton Economic Theory Papers
99f1, Economics Department, Princeton University.
- Faruk Gul & Wolfgang Pesendorfer, 2004.
"Self-Control and the Theory of Consumption,"
Econometric Society, vol. 72(1), pages 119-158, 01.
- Peter Carr & Robert Jarrow & Ravi Myneni, 1992. "Alternative Characterizations Of American Put Options," Mathematical Finance, Wiley Blackwell, vol. 2(2), pages 87-106.
- Laibson, David, 1997.
"Golden Eggs and Hyperbolic Discounting,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(2), pages 443-77, May.
- Christopher Harris & David Laibson, 2001.
Levine's Working Paper Archive
625018000000000267, David K. Levine.
- Nicholas Burger & Gary Charness & John Lynham, 2008. "Three Field Experiments on Procrastination and Willpower," Levine's Working Paper Archive 122247000000002399, David K. Levine.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Koch, Alexander K. & Nafziger, Julia, 2011. "Goals and Psychological Accounting," IZA Discussion Papers 5802, Institute for the Study of Labor (IZA).
- Burger, Nicholas & Charness, Gary & Lynham, John, 2011. "Field and online experiments on self-control," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 393-404, March.
- Philipp Weinschenk, 2010. "Increasing Workload in a Stochastic Environment," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_43, Max Planck Institute for Research on Collective Goods.
- Alexander K. Koch, & Julia Nafziger & Anton Suvorov & Jeroen van de Ven, 2012. "Self-Rewards and Personal Motivation," Economics Working Papers 2012-14, School of Economics and Management, University of Aarhus.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bo Chen).
If references are entirely missing, you can add them using this form.