Question

In which of the following cases is time inconsistency likely to be at work? [LO 8.1\(]\) a. A child plans to become a doctor when he grows up, but a month later reads a book about firefighters and decides to become a firefighter instead. b. A student keeps intending to finish reading War and Peace-next week. c. A parent plans to enroll his child in art class but enrolls her in dance class instead. d. A beginning piano player plans to practice three times a week but frequently practices only once a week.

Short answer

b and d show time inconsistency.

Step-by-step solution

Understanding Time Inconsistency

Time inconsistency occurs when a person's preferences change over time, leading to inconsistencies in decision-making where one's present self opts for a different course of action than one's past self planned.

Analyzing Option a

In this scenario, a child changes career ambitions from being a doctor to a firefighter after reading a book. This is more likely a change in preference upon gaining new information rather than time inconsistency.

Analyzing Option b

Here, a student keeps postponing reading 'War and Peace' to the next week, showing procrastination or a preference for immediate gratification over future plans. This aligns with time inconsistency.

Analyzing Option c

A parent changes the plan for enrolling a child in an art class to a dance class. This may be due to external factors or new information and does not necessarily indicate time inconsistency.

Analyzing Option d

The piano player plans to practice regularly but fails to do so frequently. This indicates a conflict between intentions and actions, reflecting time inconsistency as immediate costs are valued over long-term benefits.

Conclusion

Based on the analysis, options b and d show signs of time inconsistency due to the gap between planned and actual behaviors.

Key concepts

Decision-Making

Decision-making is a complex process that is often influenced by multiple internal and external factors. It involves choosing between alternatives and can be thought of as a series of steps that include identifying a decision, gathering relevant information, and weighing the options. However, one common complication is that our decisions might not always be consistent over time, as seen in the concept of time inconsistency.
For example, in the context of the exercise provided, a decision-making process is involved when the child decides to become a firefighter instead of a doctor. This decision could initially seem inconsistent, but it might simply represent a change in preference due to new information—the information gained by reading a book about firefighters.

• Decision-making is not static and can evolve with new information and experiences.
• Time inconsistency becomes evident when past decisions do not align with current actions or choices.

Understanding these nuances can help in identifying where time inconsistency might impact decision-making and help develop more effective strategies for future actions.

Procrastination

Procrastination is a phenomenon where individuals delay tasks or decisions despite knowing there could be negative consequences. It often reflects a preference for immediate gratification over long-term goals. In the exercise example, the student's intention to read 'War and Peace' gets postponed continually, indicating procrastination.
This behavior aligns with time inconsistency as there's a clash between the student's past intention and the current action. Some reasons why people procrastinate include:

• Lack of motivation or interest in the task
• Fear of failure or lack of confidence

By recognizing when we are prone to procrastination, we can take steps to mitigate its effects, such as setting smaller goals, creating deadlines, or finding intrinsic motivation to complete tasks.

Preferences Change

Preferences change is an inherent aspect of human behavior and decision-making. It occurs when individuals' likes or priorities shift over time due to various factors, such as acquiring new information, changing circumstances, or personal growth. This can create a scenario where previously-made plans are no longer appealing or viable.
In the provided exercise, when a child changes their vocational preference from being a doctor to a firefighter after reading a book, it is an example of preference change. This shift may not signify time inconsistency if it's based on reasoned evaluation rather than impulse.

• Preferences can change due to new insights or acquired tastes.
• This flexibility in preference is generally a healthy adaptation to a dynamic environment.

Recognizing this change can assist individuals in making informed decisions that better match their evolving values and goals.

Self-Control Issues

Self-control issues arise when individuals struggle to regulate their impulses and desires, often leading to a discrepancy between intended actions and actual behaviors. These issues are closely linked to time inconsistency, where immediate temptations or conveniences override long-term plans or goals.
In the exercise example, the beginner piano player who intends to practice three times a week but only manages once can be seen as facing self-control issues. This conflict between intention and execution is a classic manifestation of struggle between immediate comfort and future benefits.

• A lack of self-control can lead to habitual deferral of tasks, impacting productivity.
• Self-regulation strategies can help manage and overcome these challenges.

By employing techniques such as setting clear goals, rewarding progress, or finding accountability partners, individuals can improve their ability to stick to their original plans and thus reduce the influence of time inconsistency in their lives.