The standard economic model assumes that the consumer makes a plan for consumption over time, aiming to satisfy a single set of dynamically consistent preferences, and then sticks to this plan, unless new information arrives. This framework is tractable, and intuitive in the sense that it captures the deliberative side of human decision-making. An alternative framework has recently gained the attention of economists, however, in which the consumer’s ability to adhere to a plan for consumption depends on the outcome of an internal struggle. This struggle reflects two important departures from the standard model. First, consumers may have self-control problems, in the sense of dynamically inconsistent preferences: planning.
