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Temptation and commitment in the laboratory

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  • Daniel Houser
  • Daniel Schunk
  • Joachim Winter
  • Erte Xiao

Abstract

Temptation and self-control in intertemporal choice environments are receiving increasing attention in the theoretical economics literature. Nevertheless, there remains a scarcity of empirical evidence from controlled environments informing behavior under repeated temptations. This is unfortunate in light of the fact that in many natural environments, the same temptation must be repeatedly resisted. This paper fills that gap by reporting data from a novel laboratory study of economic decisions under repeat temptations. Subjects are repeatedly offered an option with instantaneous benefit that also entails a substantial reduction to overall earnings. We show that this option is “tempting” in the sense that a substantial fraction of our subjects incur pecuniary costs to eliminate the choice, and thus commit to not choosing the tempting alternative. We compare the timing and price-elasticity of these commitment decisions to predictions from existing theoretical models of decision under temptation. Our data are broadly consistent with theory, with the notable exception that commitment often occurs with delay rather than at the first opportunity. Moreover, the timing of commitment is significantly impacted by the cost of the commitment device. The patterns we report have direct implications for economic theory, and are a first step toward designing mechanisms that promote prudent economic decisions under temptation.

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Bibliographic Info

Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 488.

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Date of creation: May 2010
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Handle: RePEc:zur:iewwpx:488

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Keywords: Self-control; willpower; temptation; commitment; laboratory experiment;

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Cited by:
  1. repec:ran:wpaper:895 is not listed on IDEAS
  2. Berno Buechel & Lydia Mechtenberg & Julia Petersen, 2014. "Peer Effects and Students’ Self-Control," SFB 649 Discussion Papers SFB649DP2014-024, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  3. Alberto Bisin & Kyle Hyndman, 2014. "Present-Bias, Procrastination and Deadlines in a Field Experiment," NBER Working Papers 19874, National Bureau of Economic Research, Inc.
  4. B. Douglas Bernheim & Jonathan Meer & Neva K. Novarro, 2012. "Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption," NBER Working Papers 17762, National Bureau of Economic Research, Inc.
  5. Kirchkamp, Oliver & Prömpers, Henning, 2013. "Discharge of residual debt: Do private and institutional lenders differ?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79851, Verein für Socialpolitik / German Economic Association.
  6. Katharina M. Eckartz, 2014. "Task enjoyment and opportunity costs in the lab - the effect of financial incentives on performance in real effort tasks," Jena Economic Research Papers 2014-005, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  7. Bucciol, Alessandro & Houser, Daniel & Piovesan, Marco, 2011. "Temptation and productivity: A field experiment with children," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 126-136, April.

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