Maryna Ivets (University of Duisburg-Essen/CINCH)

In this paper we investigate self-control and motivation in connection to weight loss. We first develop a theoretical model and then test its conclusions with data from DietBet. The theoretical model, based on Gul & Pesendorfer (2001), studies a two-period decision problem of an agent who is tempted by inferior choices in period 2. A random and time-variant degree of motivation is introduced into the model to influence his perceived cost of self-control. An agent is faced with a given menu and has to exercise self-control. We introduce a commitment mechanism (a bet) that can help an agent commit to his normative choice in period 2. Theoretical results show that placing a bet on himself can help an agent to commit successfully, and also can explain why an agent with a preference for commitment can fail (behavior that is usually attributed to preference reversal). This commitment failure is associated with agent's overestimation of his future self-control's cost. We also distinguish between sophisticated and naive agents and show that placing higher wagers on themselves can help these agents commit. Our empirical results suggest that the bet mechanism encourages weight loss. More specifically, higher betting stakes are associated with greater weight loss. Overall, by placing higher wagers on themselves agents can avoid underinvestment in their future self-control and increase their chances for successful commitment.