Self-Control Preferences and Status-Quo Bias

Barokas Guy ()
Additional contact information
Barokas Guy: Economics, Ruppin Academic Center, Emek Hefer 40250, Israel

The B.E. Journal of Theoretical Economics, 2022, vol. 22, issue 2, 405-429

Abstract: In a setting of choice with an observable status quo, we model an agent who struggles with temptation by exercising (costly) self-control, and who views the status quo as a commitment opportunity that allows him to avoid the self-control costs incurred when making an active choice. Our model is rational in that the agent always maximizes the same ex-post utility function; hence, when the standard indirect utility property holds, the model reduces to classic rational choice model. However, when we allow for costly self-control, our theory provides a rationale for three well-documented phenomena that cannot be captured by the standard model: the status-quo bias, the compromise effect, and the satisficing choice procedure (when ignoring the information on the status quo). A notable feature of our theory is that while it relaxes the indirect utility property, it still allows for a complete identification of an agent’s preference relation over menus. This is found to be important in many practical situations.

Keywords: revealed preference; status-quo bias; self control; compromise effect (search for similar items in EconPapers)
JEL-codes: D03 D11 D60 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejte-2020-0136 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:22:y:2022:i:2:p:405-429:n:11

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.1515/bejte-2020-0136

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().