Self-delusion in the pursuit of happiness
AbstractThe paper explores how repeated revisions of consumption plans increase long-run utility. If agents value present anticipations of future consumption, some revisions may be viewed as a benign form of self-delusion. We consider a minimal generalization of the Samuelson discounted utility model to allow for utility linked to next period consumption. Agents are assumed to vary with respect to their sophistication. Different environments likely to facilitate repeated revisions are also considered.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 604.
Date of creation: Jan 2010
Date of revision:
Intertemporalchoice; selfdelusion; timeinconsistency; naivete; self-con trol; discountedutilityfunctions; anticipation; memory;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D60 - Microeconomics - - Welfare Economics - - - General
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-23 (All new papers)
- NEP-HAP-2010-01-23 (Economics of Happiness)
- NEP-LTV-2010-01-23 (Unemployment, Inequality & Poverty)
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