Discussion Paper Details

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Title: On Rush and Procrastination

Author(s): Isabelle Brocas and Juan D Carrillo

Publication Date: September 1999

Keyword(s): Decision Makiing Under Uncertainty, Procrastination, Rush and Time Inconsistency

Programme Area(s): Industrial Organization

Abstract: We analyze the decision of individuals with time inconsistent preferences who undertake irreversible activities yielding either a current cost and a future benefit or a current benefit and a future cost. We first show that, when benefits come earlier than costs, the individual faces a coordination problem with himself that results in multiple, rankable equilibria. Some of these equilibria may exhibit rush, in the sense that the activity is undertaken 'too early' (i.e. with a negative payoff). Multiplicity explains why individuals succeed or not in avoiding temptations, depending on 'the degree of trust in their future decision'. Second, we prove that competition between agents for the same activity can be beneficial for them both when costs come before and after benefits: it decreases the agents' incentives to procrastinate (i.e. to undertake the activity 'too late') in the former case and to rush in the latter. Last, complementarity of tasks exacerbates the tendency to rush and to procrastinate. Under procrastination, it may even imply that projects which are valuable for all agents are never undertaken.

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Bibliographic Reference

Brocas, I and Carrillo, J. 1999. 'On Rush and Procrastination'. London, Centre for Economic Policy Research.