"Self-control in Peer groups," (with
Roland Benabou and Jean Tirole)
Social influences on self-control
underlie both self-help groups and many peer interactions among youths.
To understand these phenomena, we analyze how observing each other's
behavior affects individuals' ability to deal with their own impulses.
These endogenous informational spillovers lead to either a unique "good
news" equilibrium that ameliorates behavior, a unique "bad news
equilibrium" that worsens it, or to the coexistence of both. A welfare
analysis shows that people will find social interactions valuable only
when they have enough confidence in their own and others' ability to
resist temptation. The ideal partner, however, is someone with a
slightly worse self-control problem than one's own: this makes his
successes more encouraging, and his failures less discouraging.