A Dual-Self Model of Impulse Control

2006/11/01 by Drew Fudenberg, David K Levine, David K. Levine · 32 citations
Decision Sciences · Economics, Econometrics and Finance · Psychology · #Decision-Making and Behavioral Economics #Economic theories and models #Gambling Behavior and Treatments

paper · doi:10.1257/aer.96.5.1449

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 Rabin’s paradox of risk aversion in the large and small. The model also implies that self-control costs imply excess delay, as in the O'Donoghue 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.

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