THE STRENGTH OF WEAK WILL

Abstract

The standard theory of discounting in rational choice theory does not permit weakness of will. Nor does it allow people to use precommitment strategies or private side-bets. It is also doubtful that the standard theory allows endogenous time preferences and other types of character planning. Moreover, although Becker and Murphy have demonstrated that the standard theory can accommodate the addict's inability to abstain, the theory is hard pressed to explain the relapse phenomenon and the addict's struggle to overcome his addiction. In this paper, a slight extension of the standard theory of discounting is suggested, allowing for the fact that people's discounting of future goods tends to vary unsystematically over time. These fluctuations allow for a certain type of weakness of will. A theory is developed of how rational actors handle fluctuations in their own discount rates. It is demonstrated that this allows all the phenomena mentioned before to be embedded within rational choice theory. Moreover, fluctuations tend to produce many of the same intrapsychic strategic phenomena that Ainslie has analysed in the light of the theory of hyperbolic discounting.