Timing and Self-Control

Résumé

The dual self-model of self-control with one-period lived short-run selves is excessively sensitive to the timing of shocks and to the interpolation of additional “noaction” time periods in between the dates when decisions are made. We show that when short-run selves have a random length of time this excess sensitivity goes away. We consider both linear and convex cost of self-control models, illustrating the theory through a series of examples. We examine when opportunities to consume will be avoided or delayed; we consider the way in which the marginal interest declines with delay, and we examine how preference “reversals” depend on the timing of information. To accommodate the combination of short time periods and convex costs of self control we extend the model to treat willpower as a cognitive resource that is limited in the short run.