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Persuasion Against Self-Control Problems

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  • von Wangenheim, Jonas

    (Humboldt University Berlin)

Abstract

I derive a social planner\'s optimal information design in an environment with quasi-hyperbolic discounting consumers without commitment. Consumption induces instantaneous utility, but unknown delayed cost. Consumers may or may not acquire additional costless information on the cost parameter. The planner\'s optimal signal can be interpreted as an incentive compatible consumption recommendation whenever the cost parameter is below some cut-off. Welfare strictly exceeds the one under full information. I characterize distributional conditions under which welfare attains first best.

Suggested Citation

  • von Wangenheim, Jonas, 2018. "Persuasion Against Self-Control Problems," Rationality and Competition Discussion Paper Series 98, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:98
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    References listed on IDEAS

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    More about this item

    Keywords

    bayesian persuasion; present bias; hyperbolic discounting; rational inattention;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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