The resolution game: A dual selves perspective

Abstract

This article explains the emergence of an unique equilibrium resolution as the result of a compromise between two selves with different preferences. The stronger this difference is, the more generous the resolution gets. This result is in contrast to predictions of other models in which sinful consumption is distributed bimodally. Therefore, our result fits better with our daily observations concerning a lot of ambivalent goods where we often form nonrigid resolutions. The normative analysis uses the device of a hypothetical impartial self that regards both conflicting motives as equally legitimate. The result of this analysis is dilemmatic. It demonstrates that the resolution is broken too often to be welfare maximal. However, the introduction of external self-commitment devices results in their overuse and is welfare decreasing. © 2011 by the author; licensee MDPI, Basel, Switzerland.