Please use this identifier to cite or link to this item: https://hdl.handle.net/20.500.11851/6918
Title: Intertemporal decision making with present biased preferences
Authors: Akın, Zafer
Keywords: Present-biased preferences
Long-run projects
Naivete
Bonus
Learning
Issue Date: 2012
Publisher: Elsevier
Abstract: I study the behavior of individuals with present biased preferences who are involved in costly, long-run projects. By using generic cost and reward functions, I characterize the behaviors of the sophisticated, partial naive and naive types. It is shown that there may arise cases where naives needlessly put effort on projects they never complete. Moreover, in endogenous total cost projects, the naive types always end up completing projects of lesser quality than originally intended. By introducing a bonus motive, it is shown that agents with higher self-control problems should be given a higher bonus to prevent inefficient procrastination. I, then, characterize the behavior of partially naives who potentially learn self-preferences. It is found that without learning self-preferences, partial naives behave either like sophisticates or naives depending on the level of naivete; with learning, if the learning pace is fast enough, procrastination until the deadline does not occur. (C) 2011 Elsevier B.V. All rights reserved.
URI: https://doi.org/10.1016/j.joep.2011.09.007
https://hdl.handle.net/20.500.11851/6918
ISSN: 0167-4870
1872-7719
Appears in Collections:İktisat Bölümü / Department of Economics
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

Show full item record

CORE Recommender

SCOPUSTM   
Citations

7
checked on Sep 23, 2022

WEB OF SCIENCETM
Citations

6
checked on Sep 24, 2022

Page view(s)

6
checked on Dec 26, 2022

Google ScholarTM

Check

Altmetric


Items in GCRIS Repository are protected by copyright, with all rights reserved, unless otherwise indicated.