Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2016

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Revealing Sophistication and Naïveté from Procrastination

David Freeman*

Date: 2016-05-07 11:30 am – 12:00 pm
Last modified: 2016-04-15

Abstract


Consider a person who must complete a task, and is given a set of options for completing the task at different times. The person cannot commit her future behaviour except by completing the task. This paper shows that comparing the person's completion time across different sets of completion opportunities can reveal her sophistication or naïveté about her dynamic inconsistency. I show that adding an extra opportunity to complete the task can lead a naïve (but not a sophisticated) person to complete it even later, and can lead a sophisticated (but not a naïve) person to complete the task even earlier, even if the extra opportunity is not used. This result can be obtained with or without parametric assumptions about utility. Additional results completely characterize models of naïve and sophisticated individuals in this environment. These results provide the framework for revealing the preference and sophistication types studied in O'Donoghue et al. (1999) from behaviour in a generalization of their environment.

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