Self Control and Intertemporal Choice: Evidence from Glucose and Depletion Interventions

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 21.05.2015, 12:15 - 13:30

   

Presentation by 

Peter J. Kuhn (University of California, Santa Barbara)
   

Abstract:

How relevant are resource-based models of willpower for financial choice? We estimate the effects of three treatments —prior impulse controlling activity, consumption of a sugared drink, and consumption of a sugar-free drink— on intertemporal financial decisions. Contrary to those models, prior exertion of impulse control increases financial patience. Sugared drink consumption also increases patience, but so does sugar-free drink consumption, raising doubts about blood glucose as a key willpower resource. To better understand these results, we estimate treatment effects on three structurally-estimated utility parameters for each subject. All three treatments have robust effects on utility curvature, and smaller effects on present-bias. These two parameters move together, though they are largely unaffected by the treatments among subjects with very high cognitive ability. We argue that these patterns are more consistent with a scenario where the treatments reduced subjects’ adherence to an income-as-consumption heuristic rather than affecting their willpower.

   
   
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