Fudenberg, Drew; Levine, David K. - In: American Economic Journal: Microeconomics 3 (2011) 3, pp. 34-68
We develop a dual-self model of self-control that is compatible with modern dynamic macroeconomic theory and evidence. We show that a convex cost of self-control explains a wide range of behavioral anomalies concerning risk, including the Allais paradox, and also explains the observed...