A Dual-Self Model of Impulse Control
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Open Access
- 1 November 2006
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 96 (5) , 1449-1476
- https://doi.org/10.1257/aer.96.5.1449
Abstract
We propose that a simple “dual-self” model gives a unified explanation for several empirical regularities, including the apparent time inconsistency that has motivated models of quasi-hyperbolic discounting and Rabin’s paradox of risk aversion in the large and small. The model also implies that self-control costs imply excess delay, as in the O’Donoghue and Rabin models of quasi-hyperbolic utility, and it explains experimental evidence that increased cognitive load makes temptations harder to resist. The base version of our model is consistent with the Gul-Pesendorfer axioms, but we argue that these axioms must be relaxed to account for the effect of cognitive load. (JEL D11, D81)Keywords
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