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Procrastination on Long-Term Projects

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  • O'Donoghue, Ted
  • Rabin, Matthew

Abstract

Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term project. In addition to procrastination in starting a project, a naive person might undertake costly effort to begin a project but then never complete it. When the costs of completing different stages are more unequal, procrastination is more likely, and it is when later stages are more costly that people start but don't finish projects. Moreover, if the structure of costs over the course of a project is endogenous, people are prone to choose cost structures that lead them to start but not finish projects. We also consider several extensions of the model that further illustrate how people may incur costs on projects they never complete.

Suggested Citation

  • O'Donoghue, Ted & Rabin, Matthew, 2002. "Procrastination on Long-Term Projects," Department of Economics, Working Paper Series qt1bz181nv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:econwp:qt1bz181nv
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    References listed on IDEAS

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    1. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    2. David I. Laibson & Andrea Repetto & Jeremy Tobacman, 1998. "Self-Control and Saving for Retirement," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 91-196.
    3. Laibson, David, 1998. "Life-cycle consumption and hyperbolic discount functions," European Economic Review, Elsevier, vol. 42(3-5), pages 861-871, May.
    4. Ted O'Donoghue & Matthew Rabin, 2001. "Choice and Procrastination," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 121-160.
    5. R. Benabou & J. Tirole, 1999. "Self-Confidence: Intrapersonal Strategies," Princeton Economic Theory Papers 00s1, Economics Department, Princeton University.
    6. E. S. Phelps & R. A. Pollak, 1968. "On Second-Best National Saving and Game-Equilibrium Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(2), pages 185-199.
    7. Juan D. Carrillo & Thomas Mariotti, 2000. "Strategic Ignorance as a Self-Disciplining Device," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 529-544.
    8. George Loewenstein & Drazen Prelec, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 573-597.
    9. Ainslie, George, 1991. "Derivation of "Rational" Economic Behavior from Hyperbolic Discount Curves," American Economic Review, American Economic Association, vol. 81(2), pages 334-340, May.
    10. Fischer, Carolyn, 1999. "Read This Paper Even Later: Procrastination with Time-Inconsistent Preferences," RFF Working Paper Series dp-99-20, Resources for the Future.
    11. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
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    1. Hsiao, Hsiao-Fen & Tang, Jinquan & Wen, Conghua, 2024. "Diversification's effect and manager experience on investment efficiency," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 890-900.

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