Congratulations to Alessandro Lizzeri and Leeat Yariv for receiving the American Economic Journal: Microeconomics “2018 AEJ Best Paper” award for their paper titled “Collective Self-Enforcement.” in which they model the desirability of various forms of ‘collective action’ in the form of government intervention to influence individuals’ self-control decisions. The abstract of the paper reads:
Behavioral economics presents a “paternalistic” rationale for a benevolent government’s intervention. We consider an economy where the only “distortion” is agents’ time-inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters’ preferences via the political process. Three messages emerge. First, welfare is highest under either full centralization or laissez-faire. Second, introducing collective action only on consumption decisions yields no commitment. Last, individuals’ relative preferences for commitment may reverse depending on whether future consumption decisions are centralized or not.
2017. “Collective Self-Control.” American Economic Journal: Microeconomics, 9 (3): 213-44. DOI: 10.1257/mic.20150325