articleAmerican Economic ReviewNov 1, 2006GREEN OA

A Dual-Self Model of Impulse Control

Harvard University Press · Federal Reserve Bank of St. Louis

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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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949
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Authors

2

Topics & keywords

Keywords
  • Axiom
  • Hyperbolic discounting
  • Economics
  • Dual (grammatical number)
  • Mathematical economics
  • Discounting
  • Impulse (physics)
  • Simple (philosophy)
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