Present-Focused Preferences and Sin Goods Consumption at the Extensive and Intensive Margins

Zarko Kalamov and Marco Runkel ()

No 8237, CESifo Working Paper Series from CESifo

Abstract: This paper analyzes sin goods consumption when individuals exhibit present-focused preferences. It considers three types of present focus: present-bias with varying degrees of naiveté, Gul-Pesendorfer preferences, and a dual-self approach. We investigate the incentives to deviate from healthy consumption (the extensive margin). In the first model, the extensive margin of consumption is independent of the degree of present-bias and naiveté. Likewise, in the latter frameworks, the strength of temptation and the cost of self-control do not affect the extensive margin. Hence, present-focused preferences affect the intensive margin of sin goods consumption, but not the extensive margin.

Keywords: present-bias; self-control; temptation; dual-self; sin goods (search for similar items in EconPapers)
JEL-codes: D11 D15 D60 D91 I12 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-gen, nep-hea, nep-mic and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8237

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