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Tempting goods, self-control fatigue, and time preference in consumer dynamics

Abstract

We propose a dynamic model of consumer behavior under limited self-control, emphasizing the fatiguing nature of self-regulation. The temptation theory is extended in a two-good setting with tempting and non-tempting goods, where self-regulation in moderating tempting good consumption depreciates mental capital (willpower). The resulting non-homothetic feature of consumer preferences helps describe self-regulatory behavior in such an empirically relevant way that it depends on the nature of the tempting good (luxury or inferior) and on consumer wealth. First, richer consumers are more self-indulgent and impatient in consuming tempting luxuries, whereas less so in consuming tempting inferiors: impatience is marginally increasing in wealth for jewels whereas decreasing for junk foods. Second, self-control fatigue weakens implied patience for tempting good consumption. Third, upon a stressful shock, with the resulting increasing scarcity of willpower, self-indulgence and impatience for tempting good consumption increase over time. Fourth, naive consumers, unaware of the willpower constraint, display weaker self-control in the long run than sophisticated consumers in the same wealth class would do.

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Correspondence to Shinsuke Ikeda.

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Many thanks go to Gerhard Sorger and two anonymous referees for critical comments. We are also grateful for helpful discussions to Roy Baumeister, Koichi Futagami, George Loewenstein, Heather M. Maranges, Masao Ogaki, Masahiro Okuno-Fujiwara, Yoshiyasu Ono, Makoto Saito, Ryuzo Sato, Partha Sen, Norio Takeoka, Andy Vonasch, Alexander Wagner, and the participants to the academic meetings at Academia Sinica, Springer Verlag Tokyo, Copenhagen University, Expo Hankyu Hotel, the III MOMA Meeting, Osaka University Nakanoshima Center, and Aoyama Gakuin, Hitotsubashi, Keio and Nagoya Universities. A part of this paper was written when one of us (Ikeda) stayed as visiting scholar at Carnegie Mellon University in 2016 and University of Vienna in 2017. S. Ikeda has received financial support of: the Abe Fellowship from Social Science Research Council; Grants-in-Aid for Scientific Research (B No.17H02499; S No.15H05728; and S No. 20H05631) and for Challenging Research (Exploratory No.18K18576) from the Japan Society for the Promotion of Science; the Joint Usage/ Research Center Project of ISER from the Ministry of Education, Culture, Sports, Science and Technology; Osaka University for its International Joint Research Promotion Program.

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Ikeda, S., Ojima, T. Tempting goods, self-control fatigue, and time preference in consumer dynamics. Econ Theory 72, 1171–1216 (2021). https://doi.org/10.1007/s00199-020-01320-x

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Keywords

  • Self-control
  • Willpower
  • Fatigue
  • Temptation
  • Time preference
  • Luxury

JEL Classification

  • D90
  • E21