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Persuasion Against Self-Control Problems

Jonas von Wangenheim
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Jonas von Wangenheim: Humboldt University Berlin

No 98, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: I derive a social planner\'s optimal information design in an environment with quasi-hyperbolic discounting consumers without commitment. Consumption induces instantaneous utility, but unknown delayed cost. Consumers may or may not acquire additional costless information on the cost parameter. The planner\'s optimal signal can be interpreted as an incentive compatible consumption recommendation whenever the cost parameter is below some cut-off. Welfare strictly exceeds the one under full information. I characterize distributional conditions under which welfare attains first best.

Keywords: bayesian persuasion; present bias; hyperbolic discounting; rational inattention (search for similar items in EconPapers)
JEL-codes: D01 D18 D62 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des, nep-mic and nep-upt
Date: 2018-05-29
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