Futile Attempts at Self-Control

Paul Heidhues () and Botond Kőszegi

Journal of the European Economic Association, 2009, vol. 7, issue 2-3, 423-434

Abstract: We investigate costly yet futile attempts at self-control when consumption of a harmful product has a binary breakdown/no-breakdown nature and individuals tend to underestimate their need for self-control. Considering time-inconsistent preferences as well as temptation disutility, we show that becoming more sophisticated can decrease welfare and investigate what kind of mistaken beliefs lead to low welfare. With time-inconsistent preferences, being close to perfectly understanding one's preferences but assigning zero probability to true preferences induces the worst outcome. (JEL: D03, D11, D91) (c) 2009 by the European Economic Association.

JEL-codes: D03 D11 D91 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (46)

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Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:423-434

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