Sophisticated vs naive agents
Also known as: Sophistication and naivety, Partial naivety
Whether you foresee your own future self-control failures determines how you plan around them.
What it means
In models of present-biased preferences, agents differ in how accurately they predict their own future behavior. Sophisticated agents correctly anticipate that their future selves will be impatient and act on that foresight — seeking commitment devices, setting deadlines, and avoiding temptation in advance. Naive agents wrongly believe their future selves will behave as their present, patient self wishes, so they make plans they predictably break and never demand commitment. The distinction sharply changes welfare predictions: naive procrastinators delay unpleasant tasks indefinitely because each day they expect to act 'tomorrow,' whereas sophisticates may act too soon to forestall a feared lapse. Most people are partially naive, overestimating their future self-control without being wholly blind to it, and the degree of naivety is a key target for paternalistic intervention.
Examples
A sophisticate prepays for a year of gym classes to lock in attendance; a naif keeps a flexible membership, sure they'll start going regularly next week.
A sophisticate moves savings into an account with a withdrawal penalty on payday; a naif leaves the money in the current account, certain they simply will not spend it.
Knowing they will leave the essay to the last night, one student asks the tutor for staged deadlines; a naive classmate takes the single date and files at 4am.
First described in O'Donoghue & Rabin (1999, 2001); roots in Strotz (1955).