Temptation and Self-Control
Faruk Gul, Wolfgang Pesendorfer
Econometrica · 2001 · Volume 69 · Issue 6
Abstract
We study a two-period model where ex ante inferior choice may tempt the decision-maker in the second period. Individuals have preferences over sets of alternatives that represent second period choices. Our axioms yield a representation that identifies the individual's commitment ranking, temptation ranking, and cost of self-control. An agent has a preference for commitment if she strictly prefers a subset of alternatives to the set itself. An agent has self-control if she resists temptation and chooses an option with higher ex ante utility. We introduce comparative measures of preference for commitment and self-control and relate them to our representations.
Keywords
Dynamic choice, preference for commitment, set betweenness
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