Value computation and value modulation: a dual-process theory of self-control
Abstract: We develop a theory of self-control based on a dual process approach. One brain system computes the goal value of consumption and another brain system can modulate this value by exerting costly self-control, thereby incorporating high-order considerations in the decision (e.g., healthiness or long term payoffs). The model has new testable predictions that depart form traditional analyses of temptation, self-control, hyperbolic discounting and cue triggered behavior. First, the likelihood of consuming a tempting good endogenously depends on environmental cues and, in particular, on how tempting the good is expected to be. Second, costly self-control can cause under-regulation (self-indulgence) but also over-regulation (self-restraint). Third, our dual-process theory can provide a microfoundation for present-biased preferences. Finally, individuals exert less self-control for addictive substances because the marginal value of signal modulation is lower than for non-addictive substances.
Bio: Juan D. Carrillo is a Professor of Economics at the University of Southern California and a Research Fellow at the Center for Economic Policy Research (CEPR). Before coming to USC, he was an Assistant Professor at the Free University of Brussels and an Associate Professor at Columbia Business School. Professor Carrillo has worked in Mechanism Design, Theory of Organizations, Political Economics and Behavioral Economics. He has published his research in leading journals and edited two books in Psychology and Economics. His current research interests include Neuroeconomic Theory and Experimental Economics.
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