Artikel
Willpower and compromise effect
This paper provides a behavioral foundation for the willpower as limited cognitive resource model which bridges the standard utility maximization and the Strotz models. Using the agent's ex ante preferences and ex post choices, we derive a representation that captures key behavioral traits of willpower constrained decision making. We use the model to study the pricing problem of a profit-maximizing monopolist who faces consumers with limited willpower. We show that the optimal contract often consists of three alternatives and the consumer's choices reflect a form of the "compromise effect" which is induced endogenously.
- Language
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Englisch
- Bibliographic citation
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Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 15 ; Year: 2020 ; Issue: 1 ; Pages: 279-317 ; New Haven, CT: The Econometric Society
- Classification
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Wirtschaft
- Subject
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Willpower
compromise effect
self control
temptation
contracting
- Event
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Geistige Schöpfung
- (who)
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Masatlioglu, Yusufcan
Nakajima, Daisuke
Ozdenoren, Emre
- Event
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Veröffentlichung
- (who)
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The Econometric Society
- (where)
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New Haven, CT
- (when)
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2020
- DOI
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doi:10.3982/TE3086
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Masatlioglu, Yusufcan
- Nakajima, Daisuke
- Ozdenoren, Emre
- The Econometric Society
Time of origin
- 2020
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Possible compromise for the port of Hamburg
Compromise and Containment : the Prussian reforms of 1908 in comparative perspective
Hybrid infrastructures: The role of strategy and compromise in grassroot governance
Comment : Unraveling Compromise ; The Supreme Court ; 1988 Term
European Monetary Union: No field for political compromise
Subjective well-being and income: A compromise between Easterlin paradox and its critiques
Reason-based choice: a bargaining rationale for the attraction and compromise effects
Foreign exchange equalisation: A compromise, not a genuine solution
The new OECD arrangement on export credits: Breakthrough or bad compromise?