Dynamic Inconsistency Theory

2020 ◽  
pp. 43-52
Author(s):  
Tankiso Moloi ◽  
Tshilidzi Marwala
Keyword(s):  
Dynamic Inconsistency

Revealing Naïveté and Sophistication from Procrastination and Preproperation

2021 ◽  
Vol 13 (2) ◽  
pp. 402-438
Author(s):  
David J. Freeman
Keyword(s):  
Task Completion ◽  
Dynamic Inconsistency

This paper proposes a novel way of distinguishing whether a person is naïve or sophisticated about her own dynamic inconsistency using only her task-completion behavior. It shows that adding an unused extra opportunity to complete a task can lead a naïve (but not a sophisticated) person to complete it later and can lead a sophisticated (but not a naïve) person to complete the task earlier. These results provide a framework for revealing preference and sophistication types from behavior in a general environment that includes that of O’Donoghue and Rabin (1999). (JEL D15, D91)

Adherence

2016 ◽  
Vol 5 (4) ◽  
pp. 41-53
Author(s):  
Michael Möcker ◽  
Klaus Mann
Keyword(s):  
Health Policy ◽  
Behavioral Economics ◽  
Loss Aversion ◽  
Ambiguity Aversion ◽  
Medical Advice ◽  
Libertarian Paternalism ◽  
Dynamic Inconsistency

Non-adherence to medical advice is a serious problem to patients, health policy and practitioners. This article outlines concepts of behavioral economics that might lead a patient to decide against the provider's recommendations and thus to be non-adherent. Especially the timing of pay-offs and dynamic inconsistency, their uncertainty and ambiguity aversion, loss-aversion and numerous heuristics like the peak-end-rule are discussed. The paper concludes with some hints on “libertarian” paternalism that may improve the situation.

Redistributive Politics and Economic Efficiency

1995 ◽  
Vol 89 (4) ◽  
pp. 856-866 ◽  
Author(s):  
Avinash Dixit ◽  
John Londregan
Keyword(s):  
Economic Efficiency ◽  
Technical Change ◽  
Political Process ◽  
Economic Consequences ◽  
International Competition ◽  
The Political ◽  
Redistributive Politics ◽  
Dynamic Inconsistency ◽  
Declining Industries

The political process often compensates the losers from technical change or international competition in an economically inefficient way, namely by subsidizing or protecting declining industries instead of encouraging the movement of resources to other more productive uses. We find that a dynamic inconsistency in the game of redistributive politics contributes to this outcome. To achieve economically efficient outcomes, it is necessary that those making economically inefficient choices not be given offsetting transfers. But the political process distributes income on the basis of political characteristics, which are in general different from the economic characteristics that are rewarded by the market. We identify circumstances in which the inefficient choosers have desirable political characteristics and are therefore immune from threats of having to face the economic consequences of their choices.

Modeling dynamic inconsistency with a changing reference point

2003 ◽  
Vol 16 (4) ◽  
pp. 235-255 ◽  
Author(s):  
Rachel Barkan ◽  
Jerome R. Busemeyer
Keyword(s):  
Reference Point ◽  
Dynamic Inconsistency

scholarly journals Working over Time: Dynamic Inconsistency in Real Effort Tasks *

2015 ◽  
Vol 130 (3) ◽  
pp. 1067-1115 ◽  
Author(s):  
Ned Augenblick ◽  
Muriel Niederle ◽  
Charles Sprenger
Keyword(s):  
Predictive Power ◽  
Experimental Tests ◽  
Time Inconsistency ◽  
Policy Implications ◽  
Dynamic Inconsistency ◽  
Time Dynamic ◽  
Present Bias ◽  
Monetary Rewards ◽  
Real Effort ◽  
Over Time

Abstract Experimental tests of dynamically inconsistent time preferences have largely relied on choices over time-dated monetary rewards. Several recent studies have failed to find the standard patterns of present bias. However, such monetary studies contain often-discussed confounds. In this article, we sidestep these confounds and investigate choices over consumption (real effort) in a longitudinal experiment. We pair this effort study with a companion monetary discounting study. We confirm very limited time inconsistency in monetary choices. However, subjects show considerably more present bias in effort. Furthermore, present bias in the allocation of work has predictive power for demand of a meaningfully binding commitment device. Therefore our findings validate a key implication of models of dynamic inconsistency, with corresponding policy implications.

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