Costly Self-Control and Random Self-Indulgence

Eddie Dekel*, Barton L. Lipman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

18 Scopus citations

Abstract

We study the random Strotz model, a version of the Strotz (1955) model with uncertainty about the nature of the temptation that will strike. We show that the random Strotz representation is unique and characterize a comparative notion of "more temptation averse." Also, we demonstrate an unexpected connection between the random Strotz model and a generalization of the Gul-Pesendorfer (GP) (2001) model of temptation which allows for the temptation to be uncertain and which we call random GP. In particular, a preference over menus has a random GP representation if and only if it also has a representation via a random Strotz model with sufficiently smooth uncertainty about the intensity of temptation. We also show that choices of menus combined with choices from menus can distinguish the random GP and random Strotz models.

Original languageEnglish (US)
Pages (from-to)1271-1302
Number of pages32
JournalEconometrica
Volume80
Issue number3
DOIs
StatePublished - May 2012

Keywords

  • Multi selves
  • Random temptation
  • Self control
  • Strotz
  • Temptation

ASJC Scopus subject areas

  • Economics and Econometrics

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