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Journal of Economic Behavior & Organization

Vol. 49 (2002) 113130

Emotion and self-control


Adam Gifford, Jr.
Department of Economics, California State University, Northridge, CA 91330-8374 USA
Received 22 August 2000; received in revised form 21 November 2000; accepted 14 December 2000

Abstract
A biology-based model of choice is used to examine time-inconsistent preferences and the problem of self-control. Emotion is shown to be the biological substrate of choice, in that emotional
systems assign value to goods in the environment and also facilitate the learning of expectations
regarding alternative options for acquiring those goods. A third major function of the emotional
choice systems is motivation. Self-control is shown to be the result of a problem with the inhibition
of the motive force of emotion, where this inhibition is necessary for higher level deliberation.
2002 Elsevier Science B.V. All rights reserved.
JEL classification: D0; D9
Keywords: Choice; Emotion; Inhibition; Learning; Self-control

1. Introduction
The problems of time-inconsistent preferences and self-control will be examined in the
context of a biology-based model of choice. The purpose of the model is to generate predictions regarding certain choice pathologies found in the experimental economics and
psychology literature. In particular, the biology-based model developed here generates implications that differ from current models that allow for time-variant preferences.
Time-inconsistent preferences show up in experiments in which subjects, for example,
choose a larger reward delivered in 31 days over a smaller reward delivered in 30 days,
but reverse their preferences when they can receive the smaller award immediately and the
larger after waiting for a day. To model time-inconsistency, economists often adopt some
form of hyperbolic discounting (see, Laibson, 1997, for an extensive discussion).
Several writers on the subject have suggested a multiple-self model (see, Posner, 1995, and
various articles in Elster, 1986), as a way to conceptualize the problem of time-inconsistency.
Tel.: +1-818-677-2462; fax: +1-818-677-6264.
E-mail address: adam.gifford@csun.edu (A. Gifford Jr.).

0167-2681/02/$ see front matter 2002 Elsevier Science B.V. All rights reserved.
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A. Gifford Jr. / J. of Economic Behavior & Org. 49 (2002) 113130

Some posit that some individuals are nafs, or nave, and fall prey to time-inconsistency or
self-control problems because they fail to perceive that they have a problem, whereas other
individuals are sophisticates who are fully aware of their difficulties with inconsistency
and self-control (see, Akerlof, 1991; ODonoghue and Rabin, 1999; and Strotz, 1955).
I will show that neither approach is necessary to understand the basic problem, and further,
that the evidence suggests that, at least among individuals with IQs in the normal range,
there are no nafs in the sense that there are individuals who are unaware that they have a
problem with self-control.1 The theory developed here will incorporate the evidence that
self-control is not a problem of knowing what to do, but one of doing what you know.
The problem can be characterized as an internal conflict between nature and nurture; more
specifically, it is a byproduct of cultural evolution out-pacing biological evolution.
The theory will also show that preference reversals revealed by time-inconsistency are
a subset of a more general class of inconsistencies that can occur when individuals make
choices between alternatives that are represented to the agent at different levels of abstraction. In this context, since the future is always abstract, choices between currently available
goods and future goods will very often be choices between goods with different levels of
abstraction. Similar problems, however, can arise when making choices between two goods
when both are available to the agent with a predetermined identical short delay. If one of the
two goods is represented only by a printed word, for example, and the other good is visible
to the agent when making the choice, reversing the level of abstraction of the two goods can
result in a reversal of the agents choice. The theory is able to explain self-control problems
in general, including binge behavior, and not simply time-dependent inconsistencies.

2. Value and emotion


Central to a biology-based theory of choice is the fact that human choices are biased in
favor of some alternatives over others by built-in (via natural selection) emotional subsystems. Choice is a learning process, and there are an unlimited number of possible things to
learn about the world; emotional systems bias our behavior and learning toward goods and
activities likely to enhance our survival and increase our fitness, and thereby speed up the
learning process.2 In other words . . . the brain is not non-specifically dedicated to the
processing of information, but to the processing of information that relates to an interpenetrating hierarchy of biological, social and personal-subjective values [emphasis
original] (Watt, 1998, p. 8).
The biological basis of choice starts with emotional systems that are associated with basic
requirements which support survival and enhance fitness. These genetically programmed
systems involve homeostasis levels of plasma glucose, other nutrients, fluids and fat stores,
1 Natural selection has resulted in individuals with a unified sense of self, characterized by a unified sense of
ownership and agency (see, Damasio, 1999, p. 145 and Sass, 1998, p. 543 for examples when things go wrong).
The evolutionary advantages of a unified sense of self are apparent when one considers the consequences of
actual diseases of self, for example, schizophrenia, multiple personality disorder, and coma. From a neurological
perspective the self is defined in terms of ownership, rather than changes in preferences over time. As will become
clear, self-control is not an ownership problem.
2 An increase in fitness increases the individuals chances of leaving viable offspring.

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for example, as well as the motivation of social behaviors including sex and maternal
bonding. Imbalances in these systems can lead to hunger, thirst, and other cravings. Humans
and higher animals then learn via interaction with the environment how these requirements
can be satisfied. Biological evolution is simply not up to the task of generating large numbers
of preprogrammed behaviors to facilitate survival and maximize fitness in a complex and
dynamic environment. Evolution specifies basic goals and provides learning mechanisms
which allow the animal to learn the optimal behavior in any specific environment. The
utility functions studied by economists are the product of that learning process, where the
emotional systems provide the common currency, using Rolls (2000, p. 182) terminology,
which allows the animal to choose optimally among various options given its internal state
and the environment in which it finds itself. For example, . . . does water depletion pose
a greater threat to fitness than the current food depletion (Rolls, 2000, p. 182). Finally, it
should be noted that many, if not most, of the behaviors generated are not the product of
conscious decision making.
A second major function of the emotional choice systems is motivation.3 Rational choice
models predict no gap between knowing and doing. If pure reason leads one to believe that
action X is optimal, economic theory predicts that the individual will undertake action X.
In fact, even an individual absolutely certain, intellectually, that X is the best course of
action in predictable circumstances, may still take action Y. This gap between knowing
and doing can be understood only when the motive force of emotion is factored into the
analysis. Furthermore, our choice mechanisms evolved to deal with choice in an uncertain
environment, and they facilitate the learning of expectations about the relationship between
rewards or punishments and various events that may predict those rewards or punishments.
Awareness of the role of emotion as the basis of rational choice has led several neuroscientists to reject the reason/emotion dichotomy, to reject the notion that reason can
existperhaps only existin the absence of emotion (see, Anderson et al., 1999; Damasio,
1994, 1999; Edelman, 1992; LeDoux, 1996; Panksepp, 1998; Rolls, 2000; and Watt, 1998).
Biological regulation and emotions thus play a prominent role in deliberation. Damasio
argues that, far from being an impediment to reason, emotions and feelings are crucial to
the reasoning process.
In this perspective, feelings are the sensors for match or lack thereof between nature and
circumstance. And by nature I mean both the nature we inherit as a pack of genetically
engineered adaptations, and the nature we have acquired in individual development,
through interactions with our social environment, mindfully and willfully as well as
not. Feelings, along with the emotions they come from, are not a luxury. They serve as
internal guides, and they help us communicate to others signals that can also guide them.
And feelings are neither intangible nor elusive. Contrary to traditional scientific opinion,
feelings are just as cognitive as other percepts (Damasio, 1994, p. xv).
Various components of the brains emotional systems assign basic value to aspects of the
agents environment, maintain emotion and value memory, and change the associated value
as a result of the adaptive learning that results from the brain and bodys interaction with

The word emotion is derived from the latin verb emovere, to move or to push.

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the environmentall processes necessary for deliberation.4 [E]motion binds together


virtually every type of information that the brain can encode [emphasis original] (Watt,
1998, p. 5). This central role allows emotions to perform a function in the brain similar to
the role of prices in a market system, they efficiently coordinate the activities of various
specialized areas of the brain, they ration scarce mental resources, they motivate efficient
behaviorand out of all this activity comes rational choice.
[I]t must be reaffirmed that all emotional systems have dimensional attributes, namely,
variations in the intensity of approachavoidance, and affective-arousal gradients that they
generate (Panksepp, 1998, p. 46). The magnitude of the value attached to a good or activity
is determined by how well the good or activity is expected to satisfy basic fitness-enhancing
goals and drives.5 Obviously, these values are subject to adjustment based on experience
this adjustment process is the core of adaptive search/learning and represents a component
of the biological basis of the choice process. These expected values also reflect the internal
state of the individual, so that a hungry animal will place a higher value on food than
a sated one, i.e. the values attached to a good diminish in a given period of time as the
individual consumes more and more units of that goodthey behave like marginal rates
of substitution. In other words, the values are relative, reflecting the value of one option
in terms of another.6,7 The next three sections will briefly examine some of the areas
of the brain that play important roles in deliberation and decision making. Understanding
the interaction between these areas is key to understanding the problem of self-control
because in certain clearly defined choice situations the areas generate conflicting answers.

4 Damasio (1994) discusses cases of patients who have suffered damage to the area of the prefrontal cortex, PFC
(involved in aspects of decision making) who, despite appearing normal in most ways and showing no deficits
on IQ tests, cannot make personal and social decisions. This area of the brain uses emotional associations that
assign significance to various alternatives during higher level deliberation. Though these individuals can recall
facts and events in their lives, they cannot use those facts in a coherent way to make decisions in social or personal
situations. They are unable to deliberate in situations we normally associate with rational thoughtthey can no
longer make rational decisions.
5 In a recent set of experiments, Platt and Glimcher (1999) measured the firing rates of individual neurons in an
area of a monkeys brain involved in decision making, and found that firing rates were positively correlated with
the gain expected and the probability of that gain. Further, firing rates were positively correlated with behavior that
was necessary to secure the rewards. Interestingly, Platt and Glimcher adopt an expected utility maximization-like
framework in their experiments.
6 Tremblay and Schultz (1999) also measured the activity of neurons in monkeys in an area of the brain involved
in organizing motivational and emotional behavior related to rewards and reward expectancy. Most of these
neurons responded to the relative attraction of a specific reward (a raisin) versus an alternative (a bit of apple)
rather than the absolute value of the reward, and they also ceased responding when the animal was sated. Tremblay
and Schultz examined neurons in a different area of the brain, the orbitofrontal, than Platt and Glimcher (see,
note 5), who focused on an area of the parietal cortex. The orbitofrontal is directly involved in providing value
information to frontal planning areas. The region of the parietal cortex examined by Platt and Glimcher is involved
in consolidating information from various sensory inputs that is then made available to frontal areas to facilitate
planning. What is interesting about the Platt and Glimcher results is that they show that perceptionassociation
areas of the perceptionaction hierarchy, and not just action areas, have information about the relative value of
objects in the individuals environment. This not only facilitates attending to what is important in that environment,
it also facilitates the formation of accurate expectations about what is likely to be perceived next. Knowing what
to expect, speeds recognition and results in faster response times.
7 Also see, Watanabe (1996).

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Further, understanding why this conflict occurs helps explain why the standard economic
approach to self-control generates some incorrect predictions.

3. Biology and choice


The mechanisms of emotion and value are, in evolutionary terms, far older than those
that facilitate our higher reason. Modern humans inherited their basic choice mechanisms
from . . . ancient mammals and before them ancient reptiles (Pinker, 1997, p. 371). The
precursors of the human choice mechanisms are these ancient systems. On top of these
systems, evolution has added to the mammalian brain the neocortex, the newest areas of the
cerebral cortex. It is the expansion of the neocortex that gives us our unique mental faculties,
and the expansion of one part of the neocortex, the prefrontal cortex (PFC), is of particular
importance. The PFC is a key component of the mechanisms that facilitate conscious choice.
Another component is the motivational system (MS) of the brain (see, Panksepp, 1998,
Chapter 8; Kandel et al., 1995, Chapter 33), which is an emotional subsystem that has access
to the other basic emotional inputs and is highly interconnected with the PFC. The PFC and
the MS are central mechanisms of choice, and are involved in all conscious economizing
decisions. These systems do not, however, work alone; rather, they work closely with other
emotion, motor and memory systems of the brain, as well as with the arousal, activating,
attention and perception processing systems.
The PFC, and in particular the dorsolateral area of the PFC, is an integral part of the
working memory system. Working memory has two components, the first being a form of
short-term memory, the contents of which are derived from both long-term memorythings
we have previously learnedand new information provided by the senses. The contents of
the short-term memory are maintained on line and available for processing. The second
component of working memory involves the processing of the contents in short-term storage. It is more correct to say that the PFC facilitates the highest level of processing, the most
abstract level, involving plans for the most distant future. In the brain, unlike in a computer,
many areas from the highest to the lowest are involved in the processing of information and
facilitate the generation of plans of action8 (see, Smith and Jonides, 1999, for a review).
Furthermore, [a] new item of working memory may become consolidated into long-term
memory depending on such factors as its saliency, relevance, and rehearsal (Fuster, 1995,
p. 15).
[The] PF cortex [PFC]. . . receives inputs from virtually all of the brains sensory systems
and has long been thought to be an area where diverse signals are integrated to serve
higher order cognitive functions. A major contribution of the PF cortex is the active
maintenance of behaviorally relevant information online, a process known as working
8 The prefrontal working memory system at the highest level manipulates explicit memories in the deliberation
process. Explicit memories are conscious memories or memories that we can consciously recall by accessing them
with the working memory system. The memories formed by the MS and the emotional systems that assign value
to goods are implicit memories and are not necessarily accessible for conscious contemplation. They facilitate
deliberation but we are often not consciously aware of them (see, Fuster, 1995, for a discussion of explicit and
implicit memory).

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memory. Working memory is typically studied in tasks in which an animal must remember
a cue stimulus over a delay period and then make a behavioral response based on the cue
(Rao et al., 1997, p. 821).
The working memory system, then, maintains memory that is immediately accessible, to
facilitate temporally sequenced behavior. That is, it facilities purposeful conscious behavior
including abstract reasoning, complex problem solving, and planning for the future. . .
(Courtney et al., 1998, p. 1350).
The MS facilitates the assignment of expected value to locations, behaviors and goods
where this relative expected value reflects the relative expected fitness-enhancing characteristics of those locations, behaviors and goods. Additionally, [h]igher areas of the motor
cortex [e.g. PFC] are also energized into action by the presence of DA [i.e. dopamine, an
important neurotransmitter in the MS]. Without the synaptic energy of DA, [all human
potential] remain[s] dormant and still. Without DA, human aspirations remain frozen, in an
endless winter of discontent9 [material in the brackets added for clarification] (Panksepp,
1998, p. 144).
The MS participates in the discovery of both internal (from memory) and external (from
perception) cues that predict future rewards.10 These cues can be extensively elaborated in
the working memory system. This elaboration results from extensive involvement of past
learning and current perception as well as from the recombination of sequences of behavioral
routines into new responses to novel circumstances. In many cases the values attached to
cues and actions are those discovered by the trial-and-error experiences. The PFC working
memory system in humans can also assign values to cues and actions discovered by higher
level learning without the benefit of actual or direct personal experience by the individual.
This process of using subjective values acquired second-hand requires a relatively high level
of self-control that can break down in consistent ways when the individual is confronted
with goods that have more basic emotion-driven subjective values that are the result of actual
experience. It is the interplay between the lower level MS and higher level working memory
system of the PFC that results in self-control problems in certain predictable circumstances.
The MS system helps facilitate planning and delayed responses using a discount factor that
incorporates the high discount rate of non-human animals (see, Gifford, 1999a; Kagel
et al., 1995; and footnote 14). This is the discount rate that is generated by purely biological
selection. Higher level deliberation can incorporate a lower culturally derived discount rate.
This learning-based discount rate is discussed in the following sections.

4. Inhibition and attention


A prime function of the emotional systems is the motivation of action to secure rewards.
As a result, a feature necessary for deliberation is the ability to inhibit responses to current
9 This is literally true; the individuals described by Oliver Sacks in his book Awakenings, and in the movie of
the same name, were virtually immobile until they were given L-dopa, which restored dopamine levels in systems
damaged by disease.
10 Montague et al. (1995, 1996) develop and discuss the role of the MS in decision making and choice involving
delay tasks in the context of a neural network model. Also see, Schultz et al. (1997) for an overview of the subject.

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stimuli, i.e. to inhibit this motive force. Animals capable of planning delayed responses
to secure future rewards must be able to inhibit responses to current stimuli. Behavioral
inhibition and the. . . executive functions it supports influence the motor system, wresting it
from complete control by the immediate environment so as to bring it under the control of
time (change) and the future and to put it in the service of goal-direct behavior (Barkley,
1997, p. 156).
Behavioral inhibition, along with the affective emotional valance, is mediated by the
ventral medial (including the orbitofrontal) regions of the PFC.11 From an economic point
of view, inhibition makes possible the investment activity of the prefrontal dorsallateral
working memory and the MS. According to Barkley (1997, p. 158), inhibition facilitates
higher cognition by (1) reducing responses to those things in the current environment that
have emotional value, enabling the animal to secure future rewards of higher value; (2) interrupting ongoing behavior that is proving ineffective and allowing for the formulation of new
plans; and (3) protecting the delay necessary for the first two forms of inhibition to function.

5. Language, inhibition and the rate of time preference


Higher human cognitive ability rests on our ability to think symbolically, to think using
language. Our stream of conscious thought used in planning is facilitated by the working
memory system, and is usually in the form of language.12 The use of language allows us
an additional degree of separation, during deliberation, from the salience of goods in the
current environment. It is this symbolic separation, coupled with the lower level inhibition
described above, that gives humans the feeling of separation between emotion and reason,
and allows us to calculate the implications of living in a complex social environment.
It is the expansion of the prefrontal area and the ability to use symbols that allows
Homo sapiens to think about choices in a highly abstract manner, to consider various
symbolically represented options before making final choices. Deacon (1997) reports the
results of an experiment that illustrates this point. Chimpanzees, [g]iven a choice between
two different-sized piles of a desirable food (like candy), . . . consistently choose the larger
pile, just as human children do. . . . [The experiment is then complicated] by giving the
larger pile not to the chimp who chose it but to a second chimp [the first chimp would only
receive the larger pile when he chose the smaller one]. In effect, one chimp was asked to
choose the pile another would get, and by default, which would be left for himself [material
in the brackets added for clarification] (Deacon, 1997, pp. 413414). Human children have
no trouble with this problem, [c]himps, however have extraordinary difficulty discovering
11 Evaluation of emotional valence and emotional memory is also a function of the amygdala which sends outputs
to the PFC. Rolls argues that the expansion of the ventral areas of the PFC in primates allows for an expanded roll
of that region in processing and storage of emotional memory. The ventral prefrontal region is more dynamically
flexible allowing for the updating of emotional valence due to changes in circumstances. For example, if a particular
sound becomes associated with an adverse outcome but after a period of time the link is broken the amygdala
will still respond as if the sound predicts the adverse outcome, whereas the ventral prefrontal quickly reflects the
changed circumstances.
12 This isnt to suggest that all cognition or choice relies on internal dialogue. Most mental activity is not conscious
and not in the form of language. Here we are dealing only with the highest level of mental activity.

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the winning strategy (Deacon, 1997, p. 414). The chimps have great difficulty with this
task . . . because the presence of such a salient reward undermines their ability to use
the stimulus information against itself. Being completely focused on what they want, they
seem unable to stand back from the situation, so to speak, and subjugate their desire to
pragmatic context, which requires them to do the opposite of what they would normally
do to achieve the desired end. This is a very counterintuitive association for chimps to
learn, because the indirect solution is overshadowed by the very powerful influence of its
mutually exclusive and otherwise obvious alternative. The highly rewarding nature of
the stimulus also reinforces the power of the competing association [emphasis added]
(Deacon, 1997, p. 414).
The chimp was also trained to make associations between Arabic numerals and different
quantities, so the correct digit could be matched to the given quantity of objects. When making choices between the symbolic representations (the numbers) of the larger and smaller
piles, the chimp was able to choose the symbol representing the smaller pile (i.e. the smaller
digit) and, thus, receive the larger reward (see, Deacon, 1997, p. 414). By separating the
saliency of the reward from the choice process itself, by making choices between symbols
of the rewards and not the rewards themselves, the animal was able to discover the winning
strategy.13
The evolution of language and symbolic reasoning ability allows for an additional but still
partial separation of the immediate saliency of rewards from deliberation and allows humans
to think about the long-term implications of various options. However, the separation of
reasoning and values is not complete, for the ultimate goal is still the satisfaction of basic
drives for food, sex, safety, parenthood, friendship, status, and knowledge, and for their
ultimate contribution to reproductive fitness.
Language is also necessary to think coherently about the extended future. Language is
necessary for long trains of thought, and such trains are necessary for thinking about the
future in a complex manner. This elaborated thinkingthe inner dialogueis a component
of complex higher level consciousness necessary to think about time in a complex fashion.
Language and higher consciousness are necessary for the significant decrease in the rate of
H. sapiens time preference.14 Language facilitates complex reasoning and contributes to
13 After years of training, when shown an Arabic numeral between 0 and 9 the chimp was able to choose, from
among different sets of objects, the set that contained the number of objects that matched the numeral. At the end
of [the] training period, [the chimp] could fluently move back and forth between a digit and the corresponding
quantity. This can be considered as the essence of symbolic knowledge (Dehaene, 1997, p. 37).
14 In some cases of debilitating epilepsy, patients are able to function after the severing of their corpus callosum
the major communication pathway between the two halves of the cerebral cortex. This severing prevents seizures
from spreading from one hemisphere to the other. In carefully designed experiments, differences in the behavior of
the now separated halves of the brain have been revealed. Interestingly, in some random guessing experiments the
non-lingual right hemisphere (and intact non-human animals) do better than the left. The language-dominant left
hemisphere comes up with a theory to explain the random behavior, whereas the right hemisphere, . . . liv[ing]
only in the thin moment of the present, . . . discovers the correct strategy [emphasis added] (Gazzaniga, 1998a,
p. 54). See, Gazzaniga, 1998a, 1998b for a discussions of split brain patients. Additional evidence comes from
the behavior of profoundly deaf individuals who, for various reasons, are not exposed to sign language or other
language instruction and reach adulthood without any language at all. Susan Schaller describes attempts to teach
language to one such individual. The most difficult task. . . was schedules and time. The students only time was
the present (Schaller, 1991, p. 197).

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the inhibition that makes that reasoning possible. It is this symbolic language facility that
allowed humans to develop complex culture, which itself is deeply symbolic in nature (see,
Searle, 1995). The development of language and culture facilitates an evolutionary process
that is much faster than biological evolution, i.e. cultural evolution. Cultural evolution
and language allow time preference in humans to diverge from that determined by natural
selection, that used by the MS.
Becker and Mulligan (1997) stress the importance of schooling in the process of thinking narratively about the future, arguing that education reduces the rate of time preference. . . . [T]hrough repeated practice at problem-solving, schooling helps children learn
the art of scenario simulation. Thus educated people should be more productive at reducing the remoteness of future pleasures (Becker and Mulligan, 1997, p. 736). Implicitly,
Becker and Mulligan are asserting that time preference is a cultural phenomenon. The
biology-based model of choice developed in the next few sections, following Becker and
Mulligan, and Gifford (1999a), has a core assumption that the low time preference observed
in modern humans is a product of cultural evolutionspecifically, that the culturally driven
rate of time preference that is a product of the human ability to use language diverged from
what might be called the rate of time preference in biological fitness (see, Rodgers, 1994).
In fact, since culturally-based discounting reflects real wealth-enhancing prospects, it also
results in an increase in fitness.
Evolution cannot discard existing designs and start over from scratch, it can only build
the new on top of the oldthe old higher biology-based time preference mechanisms are
still built into the human brain. These mechanisms must be overridden in decision making
by the inhibition process, which is significantly enhanced in humans by language. It is
this divergence between the cultural and biological rates of time preference that creates a
potential internal nature versus nurture conflict leading to self-control problems. The higher
level prefrontal working memory system allows the agent to consider possible events in the
extended future and to discount those events at a rate appropriate to the individuals current
environment. The lower level MS does not have access to events not yet experienced, and
as a result, ignores these purely abstract events; it also incorporates the high level discount
rate similar to that used by non-human primates and some other mammals that is a product
of natural selection. Furthermore, the lower level system participates in feeding emotional
valence into the higher level system in choice situations. As a result, the use of the lower
culturally determined discount rate can only be accomplished by overcoming the motive
force of emotion which compels the agent to choose the more immediately available option
or to avoid incurring an immediate cost. Rolls also assumes that the lower level and higher
level systems . . . will not always indicate the same action, (p. 188) but he does specify
what the differences may be.15

15 Dienes and Perner (1999) present other examples in which two areas of the brain generate different answers to
particular problems. As in the current case, these situations involve conflicts between areas that process implicit
information and areas that process explicit conscious information. Interestingly, one of their examples involves
an optical illusion. This suggests that problem of self-control might also be considered the result of an illusion
where a more immediately available good appears to have a higher value than it in fact does when all long-term
factors are considered. The illusion is caused by a truncated vision of the future produced by the motive force of
the lower level emotion systems, including the MS.

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6. Inhibition and time-inconsistency


The theory predicts that time-inconsistent preferences can occur in certain choice
situations.16 Some of the more common situations that result in self-control problems
are presented in Table 1. In Table 1 an agent confronts two alternatives involving various
combinations of present and future costs and/or benefits. The agent confronts a problem
with self-control in these situations not because he may not know he has a self-control
problem (i.e. the agent is a naf) or because of multiple-self situations, but because he faces
a conflict between nature and nurture. When the agent confronts a choice involving future
benefits, where one is available in 30 days and the other in 31 days, both options are at
equivalent abstraction levels and he will use the low culturally determined discount rate.
When the choice is moved to the present so that now he can have one good immediately
but must wait a day for the other, the two options are no longer equivalent in their level
of abstraction, and the immediate availability of the one of the goods will tend to increase
the dominance of the emotional systems over the PFC and result in a choice reflecting the
higher level discount rate used by the MS.
The examples are discussed only briefly because they represent self-control situations
similar to those presented in typical economic discussions of self-control. The cases in
Table 1 represent situations where self-control is potentially a problem. The difference
between the predictions of the current theory and those of other economic approaches
to self-control arises from an understanding of when an agent may or may not succumb
to this potential problem. This understanding leads to the different predictions because it
focuses precisely on the underlying neural cause of the problem of self-control. In Table 1
a prepotent plan is one that yields a prepotent good or bad, defined as one for which
. . . immediate reinforcement (positive of negative) is available or with which reinforcement
has been previously been associated (Barkley, 1997, p. 48).
In all four cases presented in Table 1, the optimal plan is in conflict with the prepotent
plan. In case 1, the agent must choose between a plan that results in bearing a cost now in
order to receive future benefits and a plan providing immediate benefits. An example of case
1 choice is doing homework versus watching television. In case 2 situations, the agent must
choose between options that yield immediate benefits but where the plan a good involves
16 Actually, a basic component of the self-control problem leading to time-inconsistent preferences results from
the fact that the MS evolved to deal with an uncertain world. In laboratory experiments, animals and humans
exhibit time-inconsistency. For example, Kagel et al. (1995, pp. 178180) describe experiments in which animals
display preference reversals. These cases could be attributed to the fact that only the experimenters know that
the outcomes are certain. When two reward options are available at some time in the future, the animal may very
well choose the later and larger reward, since the relative uncertainty of the two rewards will not be perceived
as very different. But when both options are moved forward, with the smaller reward available with certainty
now but the larger only after a delay, the choice of the larger reward involves considerable (if only perceived)
relative uncertainty, shifting the balance in favor of the smaller, certain and immediate reward. The same problem
contributes to the human self-control problem considered here. Even though humans beings may intellectually
know that a future reward is certain, this information does not trickle down to the MS, so they too may be impelled
to take the smaller certain reward offered now over a larger but perceived to be uncertain reward offered tomorrow.
Even though they will choose the larger reward, if both are to be received after waiting month with the same relative
delays. Zikmund-Fisher and Parker (1999) examine cases where risk aversion leads to apparently time-inconsistent
preferences in humans.

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future costs, say, choosing between carrots and potato chips at a party. An example that
illustrates case 3 is the choice between playing tennis, which yields cardiovascular fitness,
and going to a movie. In case 4, the agent faces a choice between a plan yielding a current
benefit, such as a European vacation, and one that yields only future benefits, perhaps saving
for retirement.
In these cases the self-control problem results from a conflict between present and
future gratification. Furthermore, since human beings are a highly visual species, [d]elayof-gratification tasks. . . are particularly taxing on self-control when the reward or other consequence may be visible to the individual during the delay period. . . (Barkley, 1997, p. 59).
Self-control problems result from the presence of an option that elicits a prepotent response
(Barkley, 1997, p. 48). When the goods are visible the MS responds to the cuethe visible
good itselfand predicts a very high probability that it is available for consumption, while
alternatives not present are weighted less highly. Montague et al. (1995, 1996), and Platt and
Glimcher (1999), all find that, after learning, expected value signaling neurons fire when
an animal encounters cues that predict rewards rather than when the rewards themselves
are secured. This firing on cue and during actions necessary to secure the reward facilitates
the lower level inhibition. If, however, a prepotent alternative is visible, the animal may
opt for the visible alternative rather than a higher valued option signaled by a cue but not
visible.
We have seen that an animal is much more likely to make the optimal choice when it
faces a choice not between goods themselves but instead a choice between abstract symbols standing in for the goods.17 This illustrates an important implication: self-control is
not only a problem when choices involve the present versus the future, it is also a problem when the choices are between options that are represented to the agent at different
levels of abstraction. When an animal must choose between a prepotent good that is in
sight and an option that is represented by a cue, it is making a choice between options
represented at different levels of abstraction, and this biases the choice in favor of the less
abstract visible good, even if the delay to receive the good is the same. The next level
of abstraction is the purely mental representation of cues by an animal, which in nature
would likely be mental representations of locations in its environment where food may be
found. The animal could sort through alternatives in its mind to select the alternative with
the highest expected net return. Since this deliberation process must compete with goods
and alternatives in the animals current environment the animal must be able to inhibit
responses to rewarding goods that are present during the deliberation process in order to
secure higher valued goods that are not. Humans add an additional level of abstraction by
using symbolic language in place of more concrete mental representations of goods and
locations such as mental visual images. This added abstraction results in added inhibition and
self-control.
17 There is an important difference between symbol and a cue that is used to predict access to a good. Cues signal
specific reward situations, whereas symbolic language is used much more generally. For example, the word cake
is used in many ways, such as let them eat cake, that do not involve the prediction that the speaker is going to
actually have access to cake. Specific words or numbers, unlike cues, do not in the general case predict specific
rewards situations. As a result, words are more abstract than cues, which themselves are more abstract then actual
goods.

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7. Knowing
The self-control problem identified here is not the result of failing to realize that the
problem exists or of not knowing in theory what to do about itadults of normal intelligence almost always recognize the problem. Barkley provides evidence that attention deficit
hyperactivity disorder (ADHD) is the result of difficulties inhibiting prepotent responses,
and this lack of inhibition results in difficulties in making and following through with decisions about plans involving future rewards or costs. These individuals fall at the severe
difficulties with inhibition end of an inhibition continuum.18 However, even individuals
with ADHDthose with extreme self-control problemsknow that they have a problem
and are even aware of the adaptive skills and behaviors that can be used to cope successfully
with their difficulties; their problem is in applying that knowledge. The problem, then, for
those with ADHD is not one of knowing what to do, but of doing what they know when it
would be most adaptive to do so [Italics original] (Barkley, 1997, p. 244).

8. Self-control: an example
ODonoghue and Rabin (O&R) consider self-control using a simple functional form that
displays time-inconsistency given by the following equation.
Ut (ut , ut+1 , . . . , uT ) = ut +

T


=t+1

where Ut is the consumers time-additive utility function and is the standard time preference factor. The parameter generates time-inconsistent preferences when it is less than
one, (where 0<, ; and 1,<1), when = 1 preferences are time-consistent.19 O&R
consider a simple example, where an individual chooses the week in which he will go to the
movies, where he can go on only one of four consecutive weekends, including the current
one (i.e. T = 4). The agent must decide, whether to go to a movie today or go on one of the
following three consecutive weekends, where a different movie is shown each week. The net
value of the particular movie shown each week is known by the agent and it increases each
week, i.e. the movie being shown on the current weekend has the lowest quality, and movie
quality improves progressively each weekin the example, these net values are (3,5,8,13).
Two types of agents are considered: nafs who do not know that they have a self-control
problem and sophisticates who do know they have a problem. For simplicity, the standard
discount factor is set equal to one ( = 1), and time-inconsistent preferences are introduced
by letting = 1/2. The naf forgoes the movie shown on the first Saturday, since on that
18 It is likely that there are individuals at the other end of the continuum who are too inhibited. These indecisive individuals spend too much time deliberating and avoid choosing even a plan that clearly dominates other
alternatives.
19 This equation and others typically used to model self-control problems (see, Laibson, 1997, for example),
generates a self-control problem when < 1, however, it provides no guidance as to when and why this occurs.
It is argued here that this knowledge is important for successfully predicting when a decision maker may fail or
succeed in overcoming self-control problems.

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day, when he compares the unadjusted current movie to the time-bias adjusted last movie
(i.e. 3 with 1/2 13 = 6 21 ), the last movie has a higher value. Likewise, on the second
Saturday, the agent forgoes the movie shown on that day because the adjusted value of the
last movie still exceeds the value of the current option (the movie on the second Saturday).
But the naf succumbs to a self-control problem on the third weekend and forgoes the preferred last movie. On the third weekend the relevant values are 8 for the current movie and
6 21 for the movie on the fourth weekend. The nafs behavior is not inconsistent with the
current theory; the problem is with the so-called sophisticate who, in deliberation on the first
weekend, recognizes that he will have a self-control problem on the third weekend, and so,
by backward induction, recognizes that the actual choice on the first weekend is between
the first movie and the third movie. But that moves the problem up 1 week so that now
the agent will recognize that he will have a self-control problem on the second week, and
continuing this line of reasoning he chooses the first movie: surprisingly, the sophisticate
apparently has less self-control then the naf.
The problem with this reasoning is that there are no nafs and sophisticates in the O&R
sense, only individuals who are better at inhibition than others. Thus, in this context, some
individuals will have a closer to one then others. If the so called sophisticate has a = .8,
he will end up seeing the last movie. Furthermore, the type of backward induction behavior
described by O&R is not consistent with the current theory or with observed behavior:
individuals with poor self-control have smaller s than those with better self-control. Individuals with the ability to inhibit the response to the current moviethose who can
deliberate about the value of current versus future options and then apply the backward
induction logicwill likely have the self-control to wait at least until the second week,
and then, by forward induction, until the third, and so on. If we assume that backward
induction does occur, both nafs and sophisticates would engage in it. O&Rs nafs and
sophisticates both have sufficient self-control to deliberate on the first weekend, given that
they have equivalent knowledge, both can be assumed to engage in the same behavior.
Self-control problems occur because individuals do not deliberate, because they cannot do
so when confronted with a prepotent option. Those with higher values will exhibit more
time-consistent preferences because they can better inhibit responses to prepotent options,
and if they can do that they can then use rule-guided behavior (described in the following
sections) to maintain self-control. On the other hand, individuals who have poor self-control
cannot get past the first inhibition process, the inhibition of prepotent responses, a step that
is necessary for any deliberation to take place.
When contemplating this choice problem in abstract, i.e. when not confronting an actual
choice, those with self-control problems understand their difficulties, but when faced with
a real choice they cannot muster enough inhibition to deliberatethey simply grab the
prepotent option. A similar problem confronts those with damage to the ventral medial
prefrontal area. When asked, for example, for investment advice in abstractwhen they
are not personally confronting an actual choicethey have the ability to give sound advice.
However, when they actually make personal investments, they inevitably make impulsive
and unwise decisions, usually with tragic consequences. Again, we have a disassociation
between knowing and doing, and for the same general reasons that generate the self-control
problems discussed here. The ventral medial prefrontal area feeds emotional inputs into
higher cortical areas and also facilitates inhibition; when it is damaged the individual has

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127

trouble inhibiting responses to suboptimal options (see, Damasio, 1994, 1999; Anderson
et al., 1999; and footnote 4).
Individuals with better initial self-control are able to employ rule-following behavior
involving internal speech which further facilitates self-control. Use of internal speech shifts
the deliberation process to the symbolic level and reduces the saliency of prepotent stimuli.
At a party, for example, rather than simply grabbing the prepotent option when choosing
between potato chips and carrots, if we mentally step back and revue the long-term advantages and disadvantages of the alternatives we are more likely to chose the optimal option.
The inhibition necessary for this rule-governed behavior is facilitated by lower level innate
mechanisms. There is evidence that variations in the efficacy of these inhibition mechanisms is, at least in part, determined genetically. Barkley (1997, pp. 317320), reviewing
the evidence, suggests that the proportion of genetic factors over environmental factors
contributing to ADHD is 3:1.

9. Rule-following
Stigler and Becker (1977) sought to rectify stable tastes and preferences with addictive
goods, both generally positive ones like music and potentially harmful ones like heroin, by,
in essence, allowing learning through the acquisition of consumption capital.20 The biologybased theory presented here suggests that we acquire consumption capital not just about
addictive goods but about all the activities and goods we consume. It suggests that we
have stable emotional goals and drives built in by evolution that are the substrate of our
preferences, but that we must learn which goods and activities best satisfy those emotional
systems.
That such learning is required is easily overlooked because the choice mechanisms described here work in tandem with closely related mechanisms to facilitate various rulefollowing activities, including habits and routines. Rule-following behavior, such as habits
and routines, is used by individuals to overcome problems with self-control. Internal speech
is a form of rule- following behavior that increases inhibition and facilitates self-control by
turning attention inward to symbolic representations of goods that are present in the external
environment. This inhibition then allows the individual to rehearse previously formulated
rules and also to generate new options that further increases inhibition and self-control.
Using symbols to mentally characterize various aspects of the choice problem allows for a
degree of emotional separation that facilitates such control by taking the focus of attention
off the environment and the goods that are present in it and turning the focus inward. Individuals with ADHD seem to be less able to use this rule-following strategy in dealing with
problems of self-control (see, Barkley, 1997, pp. 282285). Markets and various market
institutions facilitate the substitution of symbolic thought for dealing with actual goods,
and as a result they facilitate more self-control and lower rates of time preference.
20 Addictive goods, such as heroin, cocaine and amphetamines, cause hyperactivity in the MS, thereby increasing
the influence of that system in decision making relative to that of the PFC. This increase in dominance of the MS
helps explain the problems of self-control that typify the decisions involving the use of addictive substances by
individuals who use them (see, Gifford, 1999b and Kandel et al., 1995, pp. 625626).

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Support for institutional mechanisms that constrain individual choice seems consistent
with a recognition that using rules, including binding ones options to a predetermined
alternative, facilitates self-control. This binding represents a form of externally imposed
inhibition. Examples include preferring employer retirement plans and IRAs that are costly
to cash-out early and the seemingly irrational but common practice of over-withholding
income tax as a form of forced saving. In many cases external inhibition commitments are
freely chosen by the agent. Social security is an example of an involuntary, but seemingly
popular, external constraint. To enter voluntarily into externally enforced binding commitments requires internal inhibition on the part of the agent, he must freely make the initial
decision to externally bind his options.
Understanding this interrelationship between internal and external inhibition helps answer a question raised by Laibson. He proposed that individuals could attain time-consistency
by use of a commitment mechanism. . . [but his model] does not explain how consumers
accumulate assets [make binding commitments] in the first place (Laibson, 1997, p. 468).
Individuals increase internal inhibition by symbolizing the alternatives and equalizing, as
much as possible, the level of abstraction of the options. Just as self-control at the grocery
store is easier with a shopping list, it would be a mistake for the agent to contemplate saving
for a down payment on a house versus buying a new car while at the car dealer. Relatively
short-term goals and rules can also facilitate internal inhibition, for example, adopting a rule
to save a fixed sum each month, in a deliberation process that does not involve a specific
good as the alternative, facilitates self-control.
Evidence suggests that individuals keep mental accounts (see, Thaler, 1990, 1994) that segregate in the decision making process different categories of assets, including current income; importantly, different asset categories have different marginal propensities to consume.
In the context of the model, mental accounts may be explained as an attempt by decision
makers to restrict decisions to choices between alternatives with similar abstraction levels.
Mental accounts allow decisions to be made between like alternatives. Within accounts or
categories, decisions involve alternatives with similar abstraction levels, and, significantly,
between-account allocations are made between alternativesthe accounts themselves
that are more alike than any of their respective components. The use of mental accounts, for
example, allows the agent to represent the act of reducing current consumption to contribute
to an IRA, not as the choice between a specific good today versus an alternative in the future,
but rather in terms of shifting money from one abstractly represented account to another.
Finally, natural selection has equipped individuals with a unified sense of ownership
and self. Time-inconsistency occurs not because individuals consist of multiple-selves,
but rather, because they face different problems when making decisions involving two
future periods and decisions involving the present and the future. Decisions involving the
present require that the agent bear the additional cost of inhibiting responses to immediately
rewarding alternatives.

10. Conclusion
The theory suggests that the human ability to make choices through the mental manipulation of symbols, rather than through deliberating over the actual goods, significantly

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129

facilitates inhibition and thereby increases self-control. Using symbols in deliberation also
facilitates self-control in comparison to deliberation using more concrete mental representations of alternatives such as mental visual images. Choices involving consumption delays
are facilitated in part by the interaction of two systems: a lower level motivational learning/system that assigns expected values to alternatives that are used in deliberation and also
helps facilitate necessary delays in actually securing the rewards, and a higher level system
that makes use of those delays as part of the deliberation process. The higher level system
allows the agent to use a culturally-determined rate of time preference that in most modern
environments will be lower than the higher rate of time preference used by the MS that
is a product of natural selection. In some choice situations the two choice systems reach
different conclusions that could be characterized as conflict between nature and nurture;
this conflict finds expression as a problem of self-control. Since the lower level systems
motivate action, as well as assign value, inhibition rather than knowledge is the key to
self-control. One of the ways our language ability enhances inhibition and self-control is
that it facilitates rule-following behavior.
Our language ability also allows us to learn about and consider goods and bads we
have never before seen or consumed. These are perhaps the most abstract alternatives, and
since they will not be assigned an affective value by the lower level emotional systems,
these purely abstract options tend to present the most difficult problems with self-control,
especially when the alternative is a non-novel good already associated with an affective
value.
Finally, empirical support for the theory is found in the experiments discussed by Barkley
(1997), the cases of ventral medial lesions discussed by Damasio (1994, 1999) and his group
(Anderson et al., 1999), and the effects of addiction, (see, footnote 20). Perhaps the strongest
support for the position that self-control is not a problem of knowing what to do but of doing
what you know is illustrated by the problem of obesity. Virtually all overweight people know
that they can lose weight by reducing their intake of calories and exercising more, yet most
are unable to implement and/or maintain a diet and exercise program. In each of these
situations, self-control problems result from difficulties with inhibition.

Acknowledgements
I am grateful to Gary Anderson, Bill Brown, Tony Lowenberg and Paul Rubin for their
helpful comments. I also want to thank the participants of workshops at the George Mason
University School of Law and California State University, Northridge.
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