Abstract
Rewards often help to exercise self-control. However, whether a person receives an external or a self-reward may have different implications for her future self-control motivation. Recent research suggests that external rewards may improve self-control in the short-run but lead to a decrease of motivation to resist temptation in the long-run. Self-rewards often demonstrate reversed effects. The present paper provides a theoretical model explaining the observed differences in the effects of external and self-rewards. It is shown that psychological property of disappointment aversion may explain these differences in the situation when abstention costs are not perfectly known. The model exploits the dual-self approach to the self-control problem in combination with the principal-agent framework.
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