Anticipating Preference Reversal

Le Yaouanq, Yves (2015) Anticipating Preference Reversal. TSE Working Paper, n. 15-585, Toulouse

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Official URL: http://tse-fr.eu/pub/29461

Abstract

This paper studies the consistency between a decision-maker's choices over menus in a first period and inside menus at a later date. The main result shows that the comparison of commitment decisions and actual subsequent choices reveals whether future taste contingencies are correctly anticipated: a sophisticated individual chooses exactly the right commitment options, whereas a naive decision-maker overlooks some profitable opportunities. The paper provides absolute and comparative measures of naivete and shows under which conditions pessimistic behavior can be attributed to the presence of self-control costs. Finally, I implement an experimental protocol based on the theoretical analysis and find substantial evidence of naivete at the individual level.

Item Type: Monograph (Working Paper)
Language: English
Date: June 2015
Place of Publication: Toulouse
Uncontrolled Keywords: Self-control, Naivete, Temptation, Stochastic choice, Random Strotz
JEL codes: C91 - Laboratory, Individual Behavior
D81 - Criteria for Decision-Making under Risk and Uncertainty
D90 - General
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Sep 2015 13:08
Last Modified: 20 Nov 2018 12:18
OAI ID: oai:tse-fr.eu:29461
URI: http://publications.ut-capitole.fr/id/eprint/18408

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