Events at CERGE-EI

Prof. Yusufcan Masatlioglu

University of Michigan, Ann Arbor, USA

Authors: Yusufcan Masatlioglu, Daisuke Nakajima​, and Emre Ozdenoren

Abstract: In this paper we are interested in the behavior of individuals who have imperfect control over their immediate urges. Willpower as cognitive resource model has been proposed by experimental psychologists and has also been used by economists to explain various behavioral paradoxes. This paper complements this literature by providing a foundation for the choice behavior that can be represented by the limited willpower model. We behaviorally characterize a representation that reflects the behavior of a decision maker who has cognitive limitation in exercising self restraint. The novelty of our model is that the temptation is revealed by the standard choice data.

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