Procrastination and Obedience

Abstract

In this lecture I shall focus on situations involving repeated decisions with time inconsistent behavior. Although each choice may be close to maximizing and therefore result in only small losses, the cumulative effect of a series of repeated errors may be quite large. Thus, in my examples, decision makers are quite close to the intelligent, well-informed individuals usually assumed in economic analysis, but cumulatively they make seriously wrong decisions that do not occur in standard textbook economics. This lecture discusses and illustrates several "pathological" modes of individual and group behavior: procrastination in decision making, undue obedience to authority, membership of seemingly normal individuals in deviant cult groups, and escalation of commitment to courses of action that are clearly unwise. In each case, individuals choose a series of current actions without fully appreciating how those actions will affect future perceptions and behavior. The standard assumption of rational, forwardlooking, utility maximizing is violated. The nonindependence of errors in decision making in the series of decisions can be explained with the concept from cognitive psychology of undue salience or vividness. For example, present benefits and costs may have undue salience relative to future costs