Collective self-control

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only "distortion" is agents' time-inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters' preferences via the political process. Three messages emerge. First, welfare is highest under either full centralization or laissez-faire. Second, introducing collective action only on consumption decisions yields no commitment. Last, individuals' relative preferences for commitment may reverse depending on whether future consumption decisions are centralized or not.

Original languageEnglish (US)
Pages (from-to)213-244
Number of pages32
JournalAmerican Economic Journal: Microeconomics
Volume9
Issue number3
DOIs
StatePublished - 2017
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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