Cold feet

Larry Epstein () and Igor Kopylov

Theoretical Economics, 2007, vol. 2, issue 3, pages 231-259

Abstract: Individuals often lose confidence in their prospects as they approach the `moment of truth.' An axiomatic model of such individuals is provided. The model adapts and extends (by relaxing the Independence axiom) Gul and Pesendorfer's model of temptation and self-control to capture an individual who changes her beliefs so as to become more pessimistic as payoff time approaches. In a variation of the model, the individual becomes more optimistic at an ex post stage in order to feel better about her available options.

Keywords: Pessimism; optimism; cold feet; temptation; self-control; moment of truth; temporal proximity; confidence (search for similar items in EconPapers)
JEL-codes: D80 D81 (search for similar items in EconPapers)
Date: 2007-09-05
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