Admission Price: Free to attend.
Speaker: Dr Severine Toussaert, LSE
Series: Department of Economics Seminar Series 2016-17
Dr Severine Toussaert, LSE will speak at this seminar, part of the Department of Economics Seminar Series 2016-17. The seminars are open to all - no registration necessary.
Unlike present-biased individuals, Gul and Pesendorfer (2001) agents may pay to restrict choice sets despite expecting to resist temptation, thus eliminating self-control costs. I design an experiment to identify these self-control types, where the temptation was to read a story during a tedious task. The identification strategy relies on a two-step procedure. First, I measure commitment demand by eliciting subjects’ preferences over menus, which did or did not allow access to the story. I then implement their preferences using a random mechanism, allowing me to observe subjects who faced the choice, yet preferred commitment. A quarter to a third of subjects can be classified as self-control types according to their preferences. Of those facing the choice, virtually all self-control types behaved as they anticipated and resisted temptation. These findings suggest that policies restricting the availability of tempting options could have much larger welfare benefits than predicted by present bias models.