Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216633 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8237
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper analyzes sin goods consumption when individuals exhibit present-focused preferences. It considers three types of present focus: present-bias with varying degrees of naiveté, Gul-Pesendorfer preferences, and a dual-self approach. We investigate the incentives to deviate from healthy consumption (the extensive margin). In the first model, the extensive margin of consumption is independent of the degree of present-bias and naiveté. Likewise, in the latter frameworks, the strength of temptation and the cost of self-control do not affect the extensive margin. Hence, present-focused preferences affect the intensive margin of sin goods consumption, but not the extensive margin.
Subjects: 
present-bias
self-control
temptation
dual-self
sin goods
JEL: 
D11
D15
D60
D91
I12
Document Type: 
Working Paper
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