A Dual-Self Model of Impulse Control

David Levine and Drew Fudenberg

American Economic Review, 2006, vol. 96, issue 5, 1449-1476

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)

Date: 2006
Note: DOI: 10.1257/aer.96.5.1449
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Related works:
Working Paper: A Dual Self Model of Impulse Control (2006)
Working Paper: A Dual-Self Model of Impulse Control (2006)
Working Paper: A Dual Self Model of Impulse Control (2005)
Working Paper: A Dual Self Model of Impulse Control (2004)
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