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Timing and Self-Control

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  • Drew Fudenberg
  • David K Levine

Abstract

The dual self-model of self-control with one-period lived short-run selves is excessively sensitive to the timing of shocks and to the interpolation of additional “noaction†time periods in between the dates when decisions are made. We show that when short-run selves have a random length of time this excess sensitivity goes away. We consider both linear and convex cost of self-control models, illustrating the theory through a series of examples. We examine when opportunities to consume will be avoided or delayed; we consider the way in which the marginal interest declines with delay, and we examine how preference “reversals†depend on the timing of information. To accommodate the combination of short time periods and convex costs of self control we extend the model to treat willpower as a cognitive resource that is limited in the short run.
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Suggested Citation

  • Drew Fudenberg & David K Levine, 2010. "Timing and Self-Control," Levine's Working Paper Archive 659843000000000008, David K. Levine.
  • Handle: RePEc:cla:levarc:659843000000000008
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    File URL: http://www.dklevine.com/papers/randomly_lived.pdf
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    Cited by:

    1. Alexander Groves, 2013. "Identifying What is tempting," Working Papers ECARES 2013-41, ULB -- Universite Libre de Bruxelles.
    2. repec:eee:matsoc:v:87:y:2017:i:c:p:40-54 is not listed on IDEAS
    3. Dag Sommervoll, 2013. "Sweet self-deception," Journal of Economics, Springer, vol. 109(1), pages 73-88, May.
    4. Driscoll, John C. & Holden, Steinar, 2014. "Behavioral economics and macroeconomic models," Journal of Macroeconomics, Elsevier, vol. 41(C), pages 133-147.
    5. Gerhardt, Holger & Schildberg-Hörisch, Hannah & Willrodt, Jana, 2017. "Does self-control depletion affect risk attitudes?," European Economic Review, Elsevier, vol. 100(C), pages 463-487.
    6. Drichoutis, Andreas C. & Nayga, Rodolfo M., 2013. "Eliciting risk and time preferences under induced mood states," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 18-27.
    7. Fudenberg, Drew & Levine, David K. & Maniadis, Zacharias, 2014. "An approximate dual-self model and paradoxes of choice under risk," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 55-67.
    8. Frank Sloan & Lindsey Eldred, 2015. "Do preferences of drinker-drivers differ?," International Journal of Health Economics and Management, Springer, vol. 15(2), pages 241-268, June.
    9. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    10. Friehe, Tim & Schildberg-Hörisch, Hannah, 2014. "Crime and Self-Control Revisited: Disentangling the Effect of Self-Control on Risk and Social Preferences," IZA Discussion Papers 8109, Institute for the Study of Labor (IZA).
    11. Lucks, Konstantin, 2016. "The Impact of Self-Control on Investment Decisions," MPRA Paper 73099, University Library of Munich, Germany.
    12. Dufwenberg, Martin & Servátka, Maroš & Vadovič, Radovan, 2017. "Honesty and informal agreements," Games and Economic Behavior, Elsevier, vol. 102(C), pages 269-285.
    13. Strulik, Holger, 2016. "Limited self-control and long-run growth," Mathematical Social Sciences, Elsevier, vol. 83(C), pages 1-8.
    14. repec:eee:gamebe:v:103:y:2017:i:c:p:19-29 is not listed on IDEAS
    15. Cui, Xiangyu & Li, Duan & Shi, Yun, 2017. "Self-coordination in time inconsistent stochastic decision problems: A planner–doer game framework," Journal of Economic Dynamics and Control, Elsevier, vol. 75(C), pages 91-113.
    16. Xavier Gabaix, 2017. "Behavioral Inattention," NBER Working Papers 24096, National Bureau of Economic Research, Inc.
    17. de Haan, Thomas & van Veldhuizen, Roel, 2015. "Willpower depletion and framing effects," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 47-61.
    18. Peysakhovich, Alexander, 2014. "How to commit (if you must): Commitment contracts and the dual-self model," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 100-112.
    19. Anna Dreber & Drew Fudenberg & David K Levine & David G Rand, 2014. "Altruism and Self Control," Levine's Working Paper Archive 786969000000000962, David K. Levine.
    20. repec:eee:gamebe:v:107:y:2018:i:c:p:329-344 is not listed on IDEAS
    21. Noor, Jawwad & Takeoka, Norio, 2015. "Menu-dependent self-control," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 1-20.
    22. Alós-Ferrer, Carlos & Ritzberger, Klaus, 2016. "Equilibrium existence for large perfect information games," Journal of Mathematical Economics, Elsevier, vol. 62(C), pages 5-18.
    23. repec:eee:soceco:v:68:y:2017:i:c:p:110-118 is not listed on IDEAS

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