This paper provides a behavioral foundation for the willpower as limited cognitive resource model which bridges the standard utility maximization and the Strotz models. Using the agent's ex ante preferences and ex post choices, we derive a representation that captures key behavioral traits of willpower constrained decision making. We use the model to study the pricing problem of a profit-maximizing monopolist who faces consumers with limited willpower.
Willpower and Compromise EffectYusufcan Masatlioglu, Daisuke Nakajima, and Emre Ozdenoren ,
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