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Procrastination, self-imposed deadlines and other commitment devices

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  • Bisin, Alberto
  • Hyndman, Kyle

Abstract

In 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) naıve 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.

Suggested Citation

  • Bisin, Alberto & Hyndman, Kyle, 2009. "Procrastination, self-imposed deadlines and other commitment devices," MPRA Paper 16235, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16235
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    File URL: https://mpra.ub.uni-muenchen.de/16235/1/MPRA_paper_16235.pdf
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    References listed on IDEAS

    as
    1. Saez-Marti, Maria & Sjögren, Anna, 2008. "Deadlines and distractions," Journal of Economic Theory, Elsevier, vol. 143(1), pages 153-176, November.
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    3. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    4. Christopher Harris & David Laibson, 2013. "Instantaneous Gratification," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 205-248.
    5. Nicholas Burger & Gary Charness & John Lynham, 2008. "Three Field Experiments on Procrastination and Willpower," Levine's Working Paper Archive 122247000000002399, David K. Levine.
    6. E. S. Phelps & R. A. Pollak, 1968. "On Second-Best National Saving and Game-Equilibrium Growth," Review of Economic Studies, Oxford University Press, vol. 35(2), pages 185-199.
    7. 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.
    8. Jianjun Miao, 2008. "Option exercise with temptation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(3), pages 473-501, March.
    9. Faruk Gul & Wolfgang Pesendorfer, 2004. "Self-Control and the Theory of Consumption," Econometrica, Econometric Society, vol. 72(1), pages 119-158, January.
    10. Peter Carr & Robert Jarrow & Ravi Myneni, 2008. "Alternative Characterizations Of American Put Options," World Scientific Book Chapters,in: Financial Derivatives Pricing Selected Works of Robert Jarrow, chapter 5, pages 85-103 World Scientific Publishing Co. Pte. Ltd..
    11. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Rational procrastination
      by Economic Logician in Economic Logic on 2009-09-04 19:47:00

    Citations

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    Cited by:

    1. Koch, Alexander K. & Nafziger, Julia & Suvorov, Anton & van de Ven, Jeroen, 2014. "Self-rewards and personal motivation," European Economic Review, Elsevier, vol. 68(C), pages 151-167.
    2. Christopher Harris & David Laibson, 2013. "Instantaneous Gratification," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 205-248.
    3. David Freeman, 2016. "Revealing Naïveté and Sophistication from Procrastination and Preproperation," Discussion Papers dp16-11, Department of Economics, Simon Fraser University.
    4. Philipp Weinschenk, 2010. "Increasing Workload in a Stochastic Environment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2010_43, Max Planck Institute for Research on Collective Goods.
    5. 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.
    6. Hsiaw, Alice, 2013. "Goal-setting and self-control," Journal of Economic Theory, Elsevier, vol. 148(2), pages 601-626.
    7. Koch, Alexander K. & Nafziger, Julia, 2011. "Goals and Psychological Accounting," IZA Discussion Papers 5802, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Procrastination; Hyperbolic Discounting; Time Consistency;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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