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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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    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

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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 J. Freeman, 2021. "Revealing Naïveté and Sophistication from Procrastination and Preproperation," American Economic Journal: Microeconomics, American Economic Association, vol. 13(2), pages 402-438, May.
    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. Koch, Alexander K. & Nafziger, Julia, 2011. "Goals and Psychological Accounting," IZA Discussion Papers 5802, Institute of Labor Economics (IZA).
    7. Hsiaw, Alice, 2013. "Goal-setting and self-control," Journal of Economic Theory, Elsevier, vol. 148(2), pages 601-626.
    8. Andersen, Torben M. & Bhattacharya, Joydeep & Liu, Pan, 2023. "Commitment and partial naïveté: Early withdrawal penalties on retirement accounts," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    9. Artem Razumovskii, 2023. "Interim Deadline for Procrastinators," CERGE-EI Working Papers wp769, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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    More about this item

    Keywords

    Procrastination; Hyperbolic Discounting; Time Consistency;
    All these keywords.

    JEL classification:

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

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