Working Paper: NBER ID: w21891
Authors: Joshua S. Gans; Peter Landry
Abstract: Naively present-biased agents are known to be severe procrastinators. In team settings, procrastination can represent a form of free-riding that, in excess, can jeopardize a team's ability to meet a deadline. Here we show how naivete and present bias, despite their reputations, can be desirable traits in a teammate, enabling a team to optimize its performance while eliminating inefficient free-riding. These benefits emerge only from a more flexible specification (in comparison to existing models) as to how naive players reassess prior beliefs upon confronting present bias. By allowing the 'depth' and 'direction' of such reassessments to vary, our model links present-biased discounting theories to the recently-revived interest in modeling non-Bayesian reactions to null events, while offering a distinct approach reminiscent of level-k reasoning. Key themes from our results include the value of behavioral diversity, the opposite effects of 'introspection' and 'extrospection' on motivation, and that under- and over-thinking can both undermine efficiency.
Keywords: No keywords provided
JEL Codes: C72; D03; M11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| naively present-biased agents (D15) | team performance (M54) |
| extrospective tendencies (D91) | overcome procrastination (Y60) |
| introspective tendencies (D91) | demotivation (J62) |
| direction of belief reassessment (D91) | individual motivation (M54) |
| individual motivation (M54) | team efficiency (D24) |
| behavioral diversity in reassessment processes (D91) | full efficiency (H21) |
| self-sophisticated agent (D84) | inefficiency (D61) |
| naif exhibiting strictly outward reassessment (D80) | efficiency (D61) |
| present bias (D15) | procrastination (D29) |
| reassessment of beliefs (E65) | motivation (M54) |
| reassessment of beliefs (E65) | team outcomes (L21) |