Working Papers in Economics
No 515:
Naïve and Capricious: Stumbling into the ring of self-control conflict
Kristian Ove R. Myrseth ()
and Conny Wollbrant ()
Abstract: We model self-control conflict as a stochastic struggle of
an agent against a visceral influence, which impels the agent to act
sub-optimally. The agent holds costly pre-commitment technology to avoid
the conflict altogether and may decide whether to procure pre-commitment or
to confront the visceral influence. We examine naïve expectations for the
strength of the visceral influence; underestimating the visceral influence
may lead the agent to exaggerate the expected utility of resisting
temptation, and so mistakenly forego pre-commitment. Our analysis reveals
conditions under which higher willpower—and lower visceral
influence—reduces welfare. We further demonstrate that lowering risk
aversion could reduce welfare. The aforementioned results call into
question certain policy measures aimed at helping people improve their own
behavior.
Keywords: self-control; temptation; inter-temporal choice; pre-commitment; (follow links to similar papers)
JEL-Codes: D01; D03; D69; D90; (follow links to similar papers)
41 pages, September 1, 2011
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