The Behavioral Economics of Intrapersonal Conflict: A Critical Assessment

Abstract

Preferences often change -- even in short time intervals -- due to either the mere passage of time (present-biased preferences) or changes in environmental conditions (state-dependent preferences). On the basis of the empirical findings in the context of state-dependent preferences, we critically discuss the Aristotelian view of unitary decision makers in economics and urge a more Heraclitean perspective on human decision-making. We illustrate that the conceptualization of preferences as present-biased or state-dependent has very different normative implications under the Aristotelian view, although both concepts are empirically hard to distinguish. This is highly problematic, as it renders almost any paternalistic intervention justifiable.