“My own behavior baffles me. For I find myself not doing what I really want to do but doing what I really loathe.” Saint Paul Gul–Pesendorfer [2001] give a decision–theoretic model of temptation building on a framework of Dekel, Lipman, and Rustichini [2001]. We argue that the axiom they use to identify temptation, set betweenness, rules out plausible and interesting forms of temptation. We pro...

In a two period decision problem, we study individuals who, in the second period, may be tempted by ex ante inferior choices. Individuals have preferences over sets of alternatives that represent the feasible choices in the second period. Our axioms yield a representation that identifies the individual’s commitment ranking, her temptation ranking, and her cost of selfcontrol. We provide an axio...

There is an implicit assumption in electronic commerce that induces the buyers to believe that their deals will be handled appropriately. However, after a seller has already committed to a buyer, he may be tempted by several requests though he will not be able to supply them all. We analyze markets in which a finite set of automated buyers interacts repeatedly with a finite set of automated sel...

This paper analyzes an agent’s option exercise decision under uncertainty. The agent decides whether and when to do an irreversible activity. He is tempted by immediate gratification and suffers from self-control problems. This paper adopts the Gul and Pensendorfer selfcontrol utility model. Unlike the time inconsistent hyperbolic discounting model, it provides an explanation of procrastination...

We investigate the welfare implications of a pay as you go (PAYG) social security system in a dynastic framework in which agents have self-control problems. Unlike the previous studies, we incorporate altruism and temptation into our analysis. The presense of these two additional factors affects agents’ intertemporal decision problems in two opposite directions. That is, on the one hand agents ...

Gul and Pesendorfer [9] model the static behavior of an agent who ranks menus prior to the experience of temptation. This paper models the dynamic behavior of an agent whose ranking of menus itself is subject to temptation. The representation for the agent’s dynamically inconsistent choice behavior views him as possessing a dynamically consistent view of what choices he “should”make (a normativ...