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Collective Self Control

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  • Lizzeri, Alessandro
  • Yariv, Leeat

Abstract

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only ?distortion? is agents? time inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters? preferences via the political process. If only commitment decisions are centralized, commitment investment is more moderate than if all decisions are centralized. Commitment investment is minimal when only consumption is centralized. First-period welfare is highest under either full centralization or laissez faire, depending on the populations? time-inconsistency distribution.

Suggested Citation

  • Lizzeri, Alessandro & Yariv, Leeat, 2015. "Collective Self Control," CEPR Discussion Papers 10458, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10458
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    5. Anderberg, Dan & Rainer, Helmut & Roeder, Kerstin, 2018. "Family-specific investments and divorce with dynamically inconsistent households: Marital contracts and policy," Journal of Economic Behavior & Organization, Elsevier, vol. 148(C), pages 199-225.
    6. Mikhail Pakhnin, 2021. "Collective Choice with Heterogeneous Time Preferences," CESifo Working Paper Series 9141, CESifo.
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    More about this item

    Keywords

    Behavioral political economy; Time inconsistency; Hyperbolic discounting;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H1 - Public Economics - - Structure and Scope of Government

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