Willpower and Personal Rules

acknowledges financial support from the National Science Foundation (SES—0096431). Much of the literature on time inconsistency has studied the external commitment devices that individuals use to address their self-control problems: tying oneself to the mast, staying away from temptation, holding illiquid assets, or “asking for controls ” from others. This paper, by contrast, focuses on internal commitment mechanisms or “personal rules ” (diets, exercise regi-mens, resolutions, moral or religious precepts, etc.) through which people attempt to achieve self—discipline. The basic idea, which builds on Ainslie (1992), is that rules cause lapses to be interpreted as precedents, resulting in a loss of self—reputation which has an adverse impact on future self— control. We thus model the behavior of individuals who are unsure of their willpower (ability to delay gratification) in certain states of the world, and characterize rules as (Markovian) self— reputational equilibria where impulses for immediate gratification are held in check by the fear of “losing faith in oneself ” —which would lead to a further collapse of self—discipline. We then examine how equilibrium conduct reflects the extent to which the individual’s self—monitoring i