Section outline

  • Procrastination, like the hot–cold empathy gap described in Chapter 11, can result in time inconsistent preferences. We might see others who went to work right away, look back on our actions, and consider that we have taken the wrong strategy. Firms interested in selling products can use customer procrastination to their own advantage through price discrimination or by charging customers for services or the option to take some action that they will never exercise. In some cases, finding last-minute tax preparation is more costly than early preparation. In others, people might pay in advance for flexible tickets that they never actually find the time to use. This chapter introduces the exponential model of time discounting, the most common in economic models, and the quasi-hyperbolic model of time discounting. The latter has become one of the primary workhorses of behavioral economics. This model is expanded on in Chapter 13, where we discuss the role of people’s understanding and anticipation of their own propensity to procrastinate.


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