 Temptations as Impulsivity: How far are Regret and the Allais Paradox from Shoplifting?Elias Khalil () Economic Modelling, 2015, vol. 51, issue C, 551-559 Abstract: This paper uses shoplifting as an iconic example of succumbing to temptation, or weakness of will. It proposes that temptation is the outcome of impulsivity—i.e., biased over-confident (suboptimal) belief in success. This proposal challenges the standard literature that portrays temptation as the outcome of present-biased preferences. The payoff of the proposed modeling is that it can easily explain, first, regret, and second, the Allais paradox. Concerning regret, it is nothing but impulsivity-in-reverse: Regretting a rational decision means changing your belief about that decision so that what appeared optimal at the time now appears suboptimal. Concerning the Allais paradox (the certainty effect), it is the outcome of people’s fear of regret. Fear of regret leads people to become over-cautious, using biased under-confident beliefs that lead them to compulsive behavior such as seeking zero-risk options. Keywords: Over-confidence (impulsivity); Under-confidence (compulsivity); Weakness of Will; First-Degree Regret-of-Decision; Second-Degree Regret-of-Decision; Regret-of-State; Tragic Regret; Present-biased Preferences; Self-cheating; Cheating of Others; Self-Blame; Self-Deception; Self-Congratulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:51:y:2015:i:c:p:551-559 DOI: 10.1016/j.econmod.2015.09.016 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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