Collective Self-Control | Zendy

Alessandro Lizzeri | Zendy; Leeat Yariv | Zendy

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Collective Self-Control

Author(s) -

Alessandro Lizzeri,

Leeat Yariv

Publication year - 2017

Publication title -

american economic journal microeconomics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 5.339

H-Index - 40

eISSN - 1945-7685

pISSN - 1945-7669

DOI - 10.1257/mic.20150325

Subject(s) - consumption (sociology) , collective action , paternalism , economics , government (linguistics) , action (physics) , intervention (counseling) , microeconomics , welfare , public economics , economic interventionism , distortion (music) , dynamic inconsistency , politics , rent seeking , control (management) , law and economics , political science , market economy , psychology , law , sociology , computer science , social science , philosophy , psychiatry , amplifier , computer network , linguistics , bandwidth (computing) , management , quantum mechanics , physics

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only "distortion" is agents' time-inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters' preferences via the political process. Three messages emerge. First, welfare is highest under either full centralization or laissez-faire. Second, introducing collective action only on consumption decisions yields no commitment. Last, individuals' relative preferences for commitment may reverse depending on whether future consumption decisions are centralized or not.

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