Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243183 
Year of Publication: 
2021
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research No. 1144
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We propose a broadly applicable empirical approach to classify individuals as time-consistent versus native or sophisticated regarding their self-control limitations. Operationalizing our approach based on nationally representative data reveals that self-control problems are pervasive and that most people are at least partly aware of their limited self-control. Compared to naifs, sophisticates have higher IQs, better educated parents, and are more likely to take up commitment devices. Accounting for both the level and awareness of self-control limitations has predictive power beyond one-dimensional notions of self-control that neglect awareness. Importantly, sophistication fully compensates for self-control problems when choices involve immediate costs and later benefits. Raising people's awareness of their own self-control limitations may thus assist them in overcoming any adverse consequences.
Subjects: 
self-control
sophistication
naiveté
commitment devices
present bias
JEL: 
D91
D01
Document Type: 
Working Paper

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