Willpower and compromise effect

• 成果类型: Article
• 署名作者: Masatlioglu, Yusufcan; Nakajima, Daisuke; Ozdenoren, Emre
• 署名单位: University System of Maryland; University of Maryland College Park; Otaru University of Commerce; University of London; London Business School
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE3086
• 发表日期: 2020-01-01
• 页码: 279-317
• 关键词: Willpower; self-control; temptation; compromise effect; exploitative Contracts

摘要

This paper provides a behavioral foundation for modeling willpower as a limited cognitive resource that bridges the standard utility maximization and Strotz models. Using the agent's ex ante preferences and ex post choices, we derive a representation that captures key behavioral traits of willpower-constrained decision making. We use the model to study the pricing problem of a profit-maximizing monopolist who faces consumers with limited willpower. We show that the optimal contract often consists of three alternatives and that the consumer's choices reflect a form of the compromise effect, which is induced endogenously.