Abstract
This paper uses shoplifting as an iconic example of succumbing to temptation, or weakness of will. It proposes that temptation is the outcome of impulsivity—i.e., biased over-confident (suboptimal) belief in success. This proposal challenges the standard literature that portrays temptation as the outcome of present-biased preferences. The payoff of the proposed modeling is that it can easily explain, first, regret, and second, the Allais paradox. Concerning regret, it is nothing but impulsivity-in-reverse: Regretting a rational decision means changing your belief about that decision so that what appeared optimal at the time now appears suboptimal. Concerning the Allais paradox (the certainty effect), it is the outcome of people’s fear of regret. Fear of regret leads people to become over-cautious, using biased under-confident beliefs that lead them to compulsive behavior such as seeking zero-risk options.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
