The award will fund research in microeconomic theory. This research completes earlier work by the PI on the subject of temptation and self-control and extends it in important new directions. The two main new directions are to consider guilt/virtuousness and nonlinear effects of temptation. Guilt, disutility associated with succumbing to temptation, is a natural issue in the context of temptation but has not been previously formalized. Virtuousness refers to the mirror image of guilt, feelings of pride in resisting temptation. The nonlinear effects to be considered concern situations where the level of temptation has a signi.cant e.ect on whether temptation is relevant to the agent. For example, perhaps a low level of temptation is entirely ignored, while a moderate degree of temptation entirely changes the choice problem as perceived by the decision maker.
Finally, the PI will use the tools developed in this context in new directions. First, adapting the model to multiple agents gives a way of thinking about the value of control rights and how agents view one another. In particular, this gives a natural language for considering altruism where, for example, a father may prefer letting his son make his own decisions. Second, the model lends itself naturally to considering other reasons why larger choice sets may be worse such a computational costs in choosing from a menu or regrets associated with not choosing "correctly" from the menu.
Broader impacts include funding graduate student research. Many of the directions proposed lead to research outside the traditional boundaries of economics and, consequently, may lead to fruitful interdisciplinary work. For example, it is natural to seek input from and collaboration with psychologists in considering such topics as guilt.
