Current Institutional Affiliation
Professor, Institute of Business and Accounting, Kwansei Gakuin University

Award Information

Abe Fellowship 2014
Institutional Affiliation (at time of award):
Professor, Institute of Social and Economic Research, Osaka University
Self-Control and Consumer Behaviors Under Depletable Willpower: Theory and International Evidence

To attain high well-being in the long-run, people have to self-control, i.e., overcome temptations from more immediate gratifications. However, as psychological studies show (Baumeister and Vohs, 2003), willpower, i.e., the mental resource for self-control, is limited, and hence self-control is costly: Self-controlling for future gratifications depletes willpower, which in turn makes further self-control harder. The resulting imperfection of self-control would cause various sub-optimal (often self-destructive) behaviors, such as undersaving, overborrowing, and life-related diseases (obesity, smoking, and gamble addiction). The purpose of this project is to address critical roles of depletable willpower in consumers' decision makings and thereby elucidate, theoretically and empirically, how the consumers behave in sub-optimal (often self-destructive) manners under self-control imperfection. The project comprises two interrelated parts, theoretical part (a) and empirical part (b): Part (a) - theory: By incorporating psychological interactions between self-control and willpower into utility-maximizing decision makings, I develop new economic models to explain: (i) stylized facts concerning consumer behaviors that have been reported mainly in psychological studies (e.g., Baumeister and Tieney, 2011); and (ii) how poverty leads to the lack of willpower and hence to various sub-optimal behaviors. Part (b) - empirical study: By conducting an Internet survey in the U.S.A., I shall measure individuals' willpower or self-control ability, to examine: (i) how willpower relates to people's preferential characteristic, such as the degree of impatience (time preference in economics), the severity of time-inconsistency (hyperbolic discounting), and risk attitudes (the degree of risk aversion); (ii) how the lack of willpower actually relates to various sub-optimal choices and behaviors; and (iii) how poverty relates to the lack of willpower and the prevalence of suboptimal behaviors. By comparing the empirical results with those which I obtained in Japan and will obtain from the survey in Korea, I conduct (iv) comparative analysis concerning the relation among willpower, self-control, and sub-optimal behaviors.   Many pathological problems, prevalent in contemporary societies, such as undersaving, overborrowing, and life-related diseases, are all closely related to the choices that are made by the people who constitute the society. To provide appropriate prescription to overcome the problems, it is strongly required to elucidate how people make decisions under imperfect self-control.   This project, which aims at doing it by incorporating the role of depletable willpower, thus has highly contemporary as well as policy-relevant significance. In the existing literature (e.g., Thaler and Sunstein, 2008), people have been assumed to have infinite ability of self-control, i.e., to self-control perfectly once they get aware of the necessity of it under temptations. As this presumption overevaluates people's self-control ability, it would mislead policies. My project helps provide more appropriate prescription to overcome problems occurring due to people's lack of self-control ability.   The self-control problem also has transnational importance, because the aforementioned suboptimal behaviors commonly constitute social problems in any countries (see, Thaler and Sunstein, 2008). Besides, by integrating the U.S.A., Japan, and Korean data, this project conducts comparative analysis concerning cross-country differences in the severity of the self-control problem, the strength of willpower, and behavioral outcomes.