Previous research has shown that people tend to consume less from foods they consider more tempting. However, the underlying mechanism for these counterintuitive findings is still unknown. The current paper is the first to test the theoretically implied suggestion that the effect of food temptation strength on consumption is indirect and can be explained through temptations' perceived unhealthi...

A life-cycle model with equilibrium default in which consumers with and without temptation coexist is constructed to evaluate the 2005 bankruptcy law reform and other counterfactual reforms. The calibrated model indicates that the 2005 bankruptcy reform achieves its goal of reducing the number of bankruptcy filings, as seen in the data, but at the cost of loss in social welfare. The creditor-fr...

We propose a self-control analysis of the role of availability in valuation. We explored the hypothesis that, when temptation becomes available, counteractive self-control processes render it less valuable. We found evidence for devaluation of available temptation among gym users before they choose to forgo an unhealthy snack rather than after they make their choice (Study 1), and among student...

Abstract Imposing “sin” taxes has been the preferred way governments tried to discourage over-consumption of temptation goods for decades. However numerous evidence shows that consumers exhibit behavioral biases which can affect their reaction taxes. This paper investigates a potential bias and how it affects demand temptation: financial worries associated with poverty have shown shift attentio...

We model a decision maker who anticipates being tempted but is also uncertain about what is normatively best. Our model is an extended version of Gul and Pesendorfer’s (2001) with three time periods: in the ex ante period the agent chooses a set of menus, in the interim period she chooses a menu from this set, and in the final period she chooses from the menu. We posit axioms from the ex ante p...

The economics of happiness is applied to further the understanding of important consumption decisions in which limited willpower is often argued to lead to suboptimal choices. Based on individuals’ judgments of the quality of their lives, it is, in principle, possible to derive whether some observed behavior is suboptimal and is therefore reducing a person’s welfare. We discuss the key characte...