Temptation and choice

The choices of an agent with self-control problems may be viewed as being determined both by a consideration of his welfare (normative preference) and by his desires (temptation preference). Temptation is experienced when his temptation preference conflicts with his normative preference. He is said to have self-control problems when his choices do not necessarily respect his normative preference. This dissertation starts with a concrete question regarding the structure of temptation preferences: what do agents with self-control problems find tempting? The literature has typically assumed that agents are tempted only by immediate consumption (call them Current Temptation agents). However, it is plausible that agents may be tempted also by opportunities of consuming tempting items in the future (call them Future Temptation agents). The behavioral implications of such temptation are studied. Notably, it is found that while self-control problems induce Current Temptation agents to seek commitment opportunities, it may induce Future Temptation agents to avoid it. For instance, Future Temptation addicts may be tempted to avoid entering rehabilitation.; The dissertation then moves on to more abstract, foundational issues that arise from a study of temptation by future consumption. What behavior reveals that an agent struggles with two preference orderings? How can an observer elicit an agent's normative preference from his choices? How can he identify what the agent finds tempting? It is argued that the approach to providing foundations for models of temptation that exists in the literature (Gul and Pesendorfer [18, 19]) cannot accommodate temptation by future consumption. This is because the existing approach relies on a hypothesis, namely that temptation creates a preference for commitment, which does not necessarily hold when future consumption may be tempting.; An alternative approach to providing foundations is introduced. Motivated by the evidence on preference reversals, we hypothesize that delayed temptations are easier to resist than immediate temptations. The hypothesis suggests a procedure by which the normative and temptation components underlying choice behavior can be isolated: take as a primitive an agent's ranking of delayed rewards, uncover normative preference from his ranking of sufficiently delayed rewards, and deduce temptation preference from discrepancies between normative preference and choice. The approach is used to model Future Temptation and Current Temptation agents and to identify the behavior that distinguishes them. The latter is used to provide evidence in support of temptation by future consumption.