Willpower and Personal Rules

Much of the literature on time inconsistency has studied the external commitment devices that individuals use to address their self-control problems: tying oneself to the mast, staying away from temptation, holding illiquid assets, or “asking for controls” from others. This paper, by contrast, focuses on internal commitment mechanisms or “personal rules” (diets, exercise regimens, resolutions, moral or religious precepts, etc.) through which people attempt to achieve self—discipline. The basic idea, which builds on Ainslie (1992), is that rules cause lapses to be interpreted as precedents, resulting in a loss of self—reputation which has an adverse impact on future self— control. We thus model the behavior of individuals who are unsure of their willpower (ability to delay gratification) in certain states of the world, and characterize rules as (Markovian) self— reputational equilibria where impulses for immediate gratification are held in check by the fear of “losing faith in oneself” —which would lead to a further collapse of self—discipline. We then examine how equilibrium conduct reflects the extent to which the individual’s self—monitoring is subject to opportunistic distortions of memory or inference, such as finding excuses for one’s past behavior. We also show that people will sometimes adopt excessively rigid or “legalistic” rules that result in compulsive behavior such as miserliness, workaholism, or anorexia. These can be understood as costly forms of self—signalling where, in equilibrium, the individual is so afraid of appearing weak to himself that every decision becomes a test of his willpower, even when the stakes are minor or when self—restraint is not even desirable ex—ante. Such common instances where individuals appear to display a “salience of the future” are thus not only consistent, but actually generated by (a concern over) present—oriented preferences.