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Collective Self-Control

Lizzeri, Alessandro and Yariv, Leeat (2017) Collective Self-Control. American Economic Journal: Microeconomics, 9 (3). pp. 213-244. ISSN 1945-7669. https://resolver.caltech.edu/CaltechAUTHORS:20170828-103951662

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Abstract

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only "distortion" is agents' time-inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters' preferences via the political process. Three messages emerge. First, welfare is highest under either full centralization or laissez-faire. Second, introducing collective action only on consumption decisions yields no commitment. Last, individuals' relative preferences for commitment may reverse depending on whether future consumption decisions are centralized or not.


Item Type:Article
Related URLs:
URLURL TypeDescription
https://doi.org/10.1257/mic.20150325DOIArticle
https://www.aeaweb.org/articles?id=10.1257/mic.20150325PublisherArticle
Additional Information:© 2017 American Economic Association. We thank Wolfgang Pesendorfer, Alessandro Riboni, Nikita Roketskiy, and Michael Ting for very helpful conversations and feedback, Euncheol Shin for superb research assistance, and three anonymous referees for very useful suggestions. We gratefully acknowledge financial support from the National Science Foundation and the Gordon and Betty Moore Foundation (through grant 1158).
Funders:
Funding AgencyGrant Number
NSFUNSPECIFIED
Gordon and Betty Moore Foundation1158
Issue or Number:3
Classification Code:JEL: D11; D15; D61; D72; D91
Record Number:CaltechAUTHORS:20170828-103951662
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170828-103951662
Official Citation:Lizzeri, Alessandro, and Leeat Yariv. 2017. "Collective Self-Control." American Economic Journal: Microeconomics, 9(3): 213-44. DOI: 10.1257/mic.20150325
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80842
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:28 Aug 2017 18:38
Last Modified:03 Oct 2019 18:35

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