This paper is based on Chapter 2 of my Ph.D. Thesis (Noor (2005)). I am greatly indebted to Larry Epstein for his guidance and encouragement throughout the project and to Bart Lipman for many useful discussions. I have also benefitted from comments from Paulo Barelli, Faruk Gul, Klaus Nehring, Wolfgang Pesendorfer, Gábor Virág, seminar participants at Rochester, Princeton, Yale, Iowa, and Boston University, participants at the Canadian Economic Theory Conference (May 2004), the Risk, Uncertainty and Decisions Conference (June 2004), and the Midwest Economic Theory Meeting (Nov. 2004), and in particular from the editor and referees. The usual disclaimer applies.
Temptation and Revealed Preference
Article first published online: 14 FEB 2011
© 2011 The Econometric Society
Volume 79, Issue 2, pages 601–644, March 2011
How to Cite
Noor, J. (2011), Temptation and Revealed Preference. Econometrica, 79: 601–644. doi: 10.3982/ECTA5800
- Issue published online: 14 FEB 2011
- Article first published online: 14 FEB 2011
- Manuscript received April, 2005; final revision received August, 2010.
- dynamic inconsistency;
- preference for commitment;
Gul and Pesendorfer (2001) model the static behavior of an agent who ranks menus prior to the experience of temptation. This paper models the dynamic behavior of an agent whose ranking of menus itself is subject to temptation. The representation for the agent's dynamically inconsistent choice behavior views him as possessing a dynamically consistent view of what choices he “should” make (a normative preference) and being tempted by menus that contain tempting alternatives. Foundations for the model require a departure from Gul and Pesendorfer's idea that temptation creates a preference for commitment. Instead, it is hypothesized that distancing an agent from the consequences of his choices separates normative preference and temptation.