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A model of consumption-dependent temptation

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Abstract

The paper characterizes axiomatically a class of temptation-driven preferences. The key (but not the only) novelty of the paper is the idea that the alternative which tempts when an item x is consumed may not be the same as the alternative which tempts when another item y is consumed. For any single item to be ultimately consumed, the other items can be ranked by how much they tempt. An individual contemplates, as an alternative consumption, only the item that tempts most. The utility of a menu is then equal to the utility of the item that is consumed less a (psychological) cost of resisting temptation; this cost depends on both: the item to be consumed and the item that tempts. Unlike most of the existing literature, the axioms are imposed on deterministic menus, not on menus of lotteries.

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Authors and Affiliations

  1. Department of Economics, Northwestern University, 2001 Sheridan Road, Evanston, IL, 60208, USA

    Wojciech Olszewski

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  1. Wojciech Olszewski
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Correspondence to Wojciech Olszewski.

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Olszewski, W. A model of consumption-dependent temptation. Theory Decis 70, 83–93 (2011). https://doi.org/10.1007/s11238-009-9172-0

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  • DOI: https://doi.org/10.1007/s11238-009-9172-0

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