Information Control, Time Preference, Dynamic Inconsistency

In intertemporal decision making, an individual with dynamically inconsistent preferences always finds that he will be trapped in plan's time-inconsistent contradiction. Even if the external environment does not change and he still keeps his prior belief, the optimal dynamic plan of actions from his current perspective may no longer be optimal when considered some time later. We can depict this question by game theory's concept as: the individual is no longer one entity as in traditional theory , but a collection of "selves" , namely current self and future selves , current self's optimal plan will be abandoned by future selves , even there comes no information which can reveal uncertainty about environment.When the optimal plan is dynamically inconsistent, the individual's long-time welfare is always damaged, so a rational individual who is aware of his intrapersonal conflict has incentive to solve the contradiction, namely to limit his future selves' procrastination or haste. One possible device is to control the external information. Information control means that the current self can make use of his information advantage to control the information acquisition or transmission process, aiming to screen some information from future selves and directly influence their believes, eventually he can indirectly change future selves' behavior ,so the time inconsistent contradiction can be solved.This paper constructs under the frame of game theory, we discuss in sequence the current self's different information controlling instruments, from the information acquisition stage to information transmission stage. We use several game models to study the validity and limit of each controlling instrument. We find that some actual phenomena can be explained by our basic model.As an instruction, chapter 1 states this paper's main topic, structure, and basic research paradigm. In chapter 2, we expatiate on the most important and basic concept in this paper, namely individual's time preference. We review the cause of dynamical preference, its mathematical modeling, self-control problem, and application of hyperbolic discounting in many economic models. Furthermore, we validate the dynamical inconsistency of time preference by an economic experiment. In chapter 3, individual is isolated form environment, we focus on his intrapersonal game and discuss three possible controlling instruments. They are information refusal (strategic ignorance), forestallment and selective memory. In chapter 4, we extend form sole individual to group and comprehensive equilibrium. We can observe the result of information controlling from group's standpoint and we can also analyze the correlation between different agent's information strategy in a complex game model where exist both intrapersonal and interpersonal games. Chapter 5 summarizes this paper and considers some questions about farther research.From the special viewpoint of information and belief, our analysis finds that through refusing free information the current self can restrain future selves' ill tendency when the external information are static stock. This conclusion can be supported by finite or infinite horizon model as well. When external information are dynamic flow, current self's controlling instrument is forestallment, sometimes he would invest even under negative net present value. Selective memory can also serve as a controlling instrument, current self selectively convey information to future selves.In summary, this paper contains all possible information controlling instrument, its conclusion can give us some theoretical enlightenment and has also practical meaning. Many recent study are combined in this paper, including behavior economics, experimental economics, and information economics, we hope our discussion may do help in understanding intertemporal decision making under dynamically inconsistent preferences.