Temptation–Driven Preferences
نویسندگان
چکیده
“My own behavior baffles me. For I find myself not doing what I really want to do but doing what I really loathe.” Saint Paul What behavior can be explained using the hypothesis that the agent faces temptation but is otherwise a “standard rational agent”? In earlier work, Gul and Pesendorfer [2001] use a set betweenness axiom to restrict the set of preferences considered by Dekel, Lipman, and Rustichini [2001] to those explainable via temptation. We argue that set betweenness rules out plausible and interesting forms of temptation including some which may be important in applications. We propose a pair of alternative axioms called DFC, desire for commitment, and AIC, approximate improvements are chosen. DFC characterizes temptation as situations where given any set of alternatives, the agent prefers committing herself to some particular item from the set rather than leaving herself the flexibility of choosing later. AIC is based on the idea that if adding an option to a menu improves the menu, it is because that option is chosen under some circumstances. From this interpretation, the axiom concludes that if an improvement is worse (as a commitment) than some commitment from the menu, then the best commitment from the improved menu is strictly preferred to facing that menu. We show that these axioms characterize a natural generalization of the Gul–Pesendorfer representation.
منابع مشابه
Temptation and Self-Control as Duals1
Dekel, Lipman, and Rustichini [2008] attempt "[to identify] the broadest possible set of temptation-driven behavior." They argue that a desire for commitment characterizes such behavior. However, we argue that they go too far by including preferences which are not temptation-driven. We introduce two axioms which are stronger than their Desire for Commitment and weaker than Gul and Pesendorfers...
متن کاملThe Simple Theory of Temptation and Self-Control†
We analyze a two period model of temptation for a finite choice setting. We formalize the idea that temptation depends only on the most tempting alternatives and provide two representations of such preferences. The representation is an ordinal analogue of the self-control preferences in Gul and Pesendorfer (2001). † This research was supported by grants SES9911177, SES0236882, SES9905178 and SE...
متن کاملNonlinear pricing with self-control preferences
This paper studies optimal nonlinear pricing for a monopolist when consumers’ preferences exhibit temptation and self-control as in Gul and Pesendorfer (2001a). Consumers are subject to temptation inside the store but exercise self-control, and those foreseeing large self-control costs do not enter the store. Consumers differ in their preferences under temptation. When all consumers are tempted...
متن کاملLife-cycle Models, Economic Puzzles and Temptation Preferences
This paper focuses on the difficulty of standard life-cycle models to predict the behavior observed in the reality, most noticeably the excess sensitivity of consumption to income, the under-provision for old-age consumption, the limited participation in the financial market, and the lack of asset decumulation after retirement. It shows that allowing for preference reversals, as it is the case ...
متن کامل