I would like to thank Val Lambson, Eddie Dekel, Bart Lipman, and numerous seminar audiences for their comments. A co-editor and three anonymous referees provided very useful comments. I especially thank my advisor, Larry Epstein, for his guidance. The results presented here were originally distributed in a paper titled “Temptation and Self-Control as Duals.”
Article first published online: 8 FEB 2010
© 2010 The Econometric Society
Volume 78, Issue 1, pages 349–376, January 2010
How to Cite
Stovall, J. E. (2010), Multiple Temptations. Econometrica, 78: 349–376. doi: 10.3982/ECTA8090
- Issue published online: 8 FEB 2010
- Article first published online: 8 FEB 2010
- Manuscript received August, 2008; final revision received September, 2009.
We use a preference-over-menus framework to model a decision maker who is affected by multiple temptations. Our two main axioms on preference—exclusion and inclusion—identify when the agent would want to restrict his choice set and when he would want to expand his choice set. An agent who is tempted would want to restrict his choice set by excluding the normatively worst alternative of that choice set. Simultaneously, he would want to expand his choice set by including a normatively superior alternative. Our representation identifies the agent's normative preference and temptations, and suggests the agent is uncertain which of these temptations will affect him. We provide examples to illustrate how our model improves on those of Gul and Pesendorfer (2001) and Dekel, Lipman, and Rustichini (2009).