Reportgreen2014

On the Interaction of Memory and Procrastination: Implications for Reminders

15 citations0/0 files storedNational Bureau of Economic Research

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Decision-Making and Behavioral Economics Financial Literacy, Pension, Retirement Analysis Experimental Behavioral Economics Studies

Abstract

I examine the interaction between present-bias and limited memory.Individuals in the model must choose when and whether to complete a task, but may forget or procrastinate.Present-bias expands the effect of memory: it induces delay and limits take-up of reminders.Cheap reminder technology can bound the cost of limited memory for time-consistent individuals but not for present-biased individuals, who procrastinate on setting up reminders.Moreover, while improving memory increases welfare for time-consistent individuals, it may harm present-biased individuals because limited memory can function as a commitment device.Thus, present-biased individuals may be better off with reminders that are unanticipated.Finally, I show how to optimally time the delivery of reminders to present-biased individuals.

Citations in this library

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References

2002Time Discounting and Time Preference: A Critical Review 1997Golden Eggs and Hyperbolic Discounting 2002RETRACTED: Procrastination, Deadlines, and Performance: Self-Control by Precommitment 2001The Hyperbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation 2001Choice and Procrastination 2000The Power of Suggestion: Inertia in 401(K) Participation and Savings Behavior 1997Bidding on the future: Evidence against normative discounting of delayed rewards.2007Prospective Memory: An Overview and Synthesis of an Emerging Field

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