Universität Bonn

Department of Economics

Micro Theory Seminar

Botond Közsegi (briq) 12.10.2022

We model an agent who stubbornly underestimates how much his behavior is driven by undesirable motives, and, attributing his behavior to other considerations, updates his view about those considerations. We study general properties of the model, and then apply the framework to identify novel implications of partially naive present bias. In many stable situations, a partially naive present-biased agent appears realistic in that he eventually predicts his behavior well. His unrealistic self-view does, however, manifest itself in several other ways. First, in basic settings he always comes to act in a more present-biased manner than a realistic agent. Second, he systematically mispredicts how he will react when circumstances change, such as when incentives for forward-looking behavior increase or he is placed in a new, ex-ante identical environment. Third, he follows empirically realistic addiction-like consumption dynamics that he does not anticipate. Fourth, he holds beliefs that — when
Wednesday, 12.10.22 - 04:30 PM - 05:45 PM
Misinterpreting Yourself
Target groups



Juridicum, Faculty Meeting Room
not required
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