American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
A Dual-Self Model of Impulse Control
American Economic Review
vol. 96,
no. 5, December 2006
(pp. 1449–1476)
Abstract
We propose that a simple dual-self model gives a unified explanation for several empirical regularities, including the apparent time inconsistency that has motivated models of quasi-hyperbolic discounting and Rabins paradox of risk aversion in the large and small. The model also implies that self-control costs imply excess delay, as in the ODonoghue and Rabin models of quasi-hyperbolic utility, and it explains experimental evidence that increased cognitive load makes temptations harder to resist. The base version of our model is consistent with the Gul-Pesendorfer axioms, but we argue that these axioms must be relaxed to account for the effect of cognitive load. (JEL D11, D81)Citation
Fudenberg, Drew, and David K. Levine. 2006. "A Dual-Self Model of Impulse Control." American Economic Review, 96 (5): 1449–1476. DOI: 10.1257/aer.96.5.1449Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D81 Criteria for Decision-Making under Risk and Uncertainty