Costly Self Control and Random Self Indulgence

Eddie Dekel and Barton Lipman ()

No 275768, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: We study the random Strotz model, a version of the Strotz (1955) model with uncer- tainty about the nature of the temptation that will strike. We show that the random Strotz representation is unique and characterize a comparative notion of \more temp- tation averse." Also, we demonstrate an unexpected connection between the random Strotz model and a generalization of the Gul{Pesendorfer (GP) (2001) model of temp- tation which allows for the temptation to be uncertain and which we call random GP. In particular, a preference over menus has a random GP representation i it also has a representation via a random Strotz model with suciently smooth uncertainty about the intensity of temptation. We also show that choices of menus combined with choices from menus can distinguish the random GP and random Strotz models.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 36
Date: 2011-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Costly Self‐Control and Random Self‐Indulgence (2012)
Working Paper: Costly Self Control and Random Self Indulgence (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275768

DOI: 10.22004/ag.econ.275768

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