This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
American Economic Review: Vol. 89 No. 1 (March 1999)
AER Volume. 89, Issue 1 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
AER Forthcoming Articles
Full-text Article
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
AER Forthcoming Articles
Doing It Now or Later
Article Citation
O'Donoghue, Ted, and
Matthew Rabin. 1999. "Doing It Now or Later."
American Economic Review,
89(1): 103-124.
DOI: 10.1257/aer.89.1.103
DOI: 10.1257/aer.89.1.103
Abstract
The authors examine self-control problems--modeled as time-inconsistent, present-biased preferences--in a model where a person must do an activity exactly once. They emphasize two distinctions: do activities involve immediate costs or immediate rewards, and are people sophisticated or naive about future self-control problems? Naive people procrastinate immediate-cost activities and preproperate--do too soon--immediate-reward activities. Sophistication mitigates procrastination but exacerbates preproperation. Moreover, with immediate costs, a small present bias can severely harm only naive people, whereas with immediate rewards it can severely harm only sophisticated people. Lessons for savings, addiction, and elsewhere are discussed.
Article Full-Text Access
Full-text Article
Authors
O'Donoghue, Ted (Cornell U)
Rabin, Matthew (U CA, Berkeley)
Rabin, Matthew (U CA, Berkeley)
JEL Classifications
D91: Intertemporal Consumer Choice; Life Cycle Models and Saving
D11: Consumer Economics: Theory
D11: Consumer Economics: Theory
