Behavioral Economics of Self-Control

Abstract

This article aims at contributing to the behavioral economic studies by providing a comprehensive literature survey on relationship between self-control and decision making. Self-control is defined based on the dual-process theory, thereby discussing its theoretical and empirical implications for decision making and behavior. Comprehensive survey is provided for empirical insights that have been found not only in economics but also in psychology and other related fields on behavioral effects of self-control and its depletion. Theoretical implications of self-control are discussed using dual-self models based on the temptation theory. A direction toward new consumption theory incorporating limited willpower is suggested, wherein endogenizing willpower dynamics allows us to describe the convexity of self-control costs and the intertemporal substitutability of self-control as consistent with stylized facts.