Asymmetric Naïveté: Beliefs About Self-Control

Do individuals anticipate time inconsistency in others? This paper jointly investigates beliefs about one’s own and others’ present bias. In an online laboratory experiment, participants engaged in a real-effort task display little awareness of their own present bias but anticipate present bias in others. Structurally, I estimate a present bias parameter [Formula: see text] of 0.82. Participants perceive others’ [Formula: see text] to be 0.87, indicating substantial sophistication, contrasted with 1.03 for themselves, indicating full naïveté. At the individual level, asymmetric naïveté correlates with overoptimism regarding one’s own versus others’ task enjoyment and time availability. The wedge in beliefs about present bias can inform equilibrium outcomes in a number of collaborative, competitive, and hierarchical settings, including teams in the workplace, management practices such as deadlines and tournament incentive schemes, and household consumption decisions. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: Financial support from the Laboratory for Economic Applications and Policy (Harvard University); Pershing Square Venture Fund for Research on the Foundations of Human Behavior (Harvard University); Harvard Business School (PhD Research Budget); and the Russell Sage Foundation (Small Research Grant) is gratefully acknowledged. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.01780 .