Goal-setting and self-control

A-Tier
Journal: Journal of Economic Theory
Year: 2013
Volume: 148
Issue: 2
Pages: 601-626

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper addresses the role of non-binding goals to attenuate time inconsistency. Present-biased agents have linear reference-dependent preferences and endogenously set a goal that is the reference point. They face an infinite horizon, optimal stopping problem in continuous time. When there is sufficient commitment to expectation-based goals, goal-setting attenuates the present-biased agentʼs tendency to stop too early, and may even lead an agent to wait longer than the first-best. In particular, reference dependence is strictly worse for a time-consistent agent. Notably, none of the effects of goal-setting require loss aversion.

Technical Details

RePEc Handle
repec:eee:jetheo:v:148:y:2013:i:2:p:601-626
Journal Field
Theory
Author Count
1
Added to Database
2026-02-02