Interim Deadline for Procrastinators

Artem Razumovskii

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: People are partially time inconsistent and many have difficulties committing to a detailed schedule for a project. I study optimal interim deadlines and how they affect the behavior and resulting welfare of the present-biased agent. I consider a model in which there are three types of agent in terms of how the agent understands her present bias: na¨ive, sophisticated, and partially-sophisticated. For each type, there is a unique design for an exogenous interim deadline that maximizes the agent’s welfare. However, only the sophisticated agent would self-impose an optimal interim deadline, while the na¨ive agent would not apply a self-imposed deadline at all. The partially-sophisticated agent sets a nonoptimal self-imposed deadline and can even decrease her own welfare by imposing it. The main result is that the partiallysophisticated agent who is relatively less present-biased would decrease her own welfare by using a self-imposed deadline, and the partially-sophisticated agent who is relatively more present-biased would increase her welfare.

Keywords: Time-Inconsistent Preferences; Present Bias; Deadlines; Procrastination; SelfControl (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-mic
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