Costly self-control and limited willpower

Meng-Yu Liang (), Simon Grant and Sung-Lin Hsieh ()
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Meng-Yu Liang: Academia Sinica
Sung-Lin Hsieh: University of Michigan

Economic Theory, 2020, vol. 70, issue 3, No 1, 607-632

Abstract: Abstract In Gul and Pesendorfer (Econometrica 69(6):1403–1435, 2001), a decision-maker, when facing a choice among menus, evaluates each menu in terms of the maximum value of its commitment utility net of self-control costs. This paper extends the model such that this maximum is constrained by the condition that the cost of self-control cannot exceed the decision-maker’s stock of willpower w. Four of the five axioms of our characterization are as in their Theorem 3 except that the independence axiom is restricted to a subset of menus. We add one new axiom to regulate willpower as a limited (cognitive) resource in which the available “stock” does not vary across menus. In our characterization, choices within menus that satisfy WARP reveal a constant trade-off between commitment and temptation utilities. However, it is the discontinuity of preferences over menus (along with violations of WARP for choices within menus) that reveals w (measured in units of temptation utility), allowing for a behaviorally meaningful comparative measure of self-control across individuals.

Keywords: Temptation; Self-control; Willpower; Revealed preference; D81; D91; D11 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00199-019-01231-6

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