Collective Self Control

Alessandro Lizzeri and Leeat Yariv

No 10458, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only ?distortion? is agents? time inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters? preferences via the political process. If only commitment decisions are centralized, commitment investment is more moderate than if all decisions are centralized. Commitment investment is minimal when only consumption is centralized. First-period welfare is highest under either full centralization or laissez faire, depending on the populations? time-inconsistency distribution.

Keywords: Behavioral political economy; Time inconsistency; Hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: D04 D70 H1 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-cdm, nep-mfd, nep-neu and nep-pol
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Citations: View citations in EconPapers (1)

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Journal Article: Collective Self-Control (2017)
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