On the Interaction of Memory and Procrastination: Implications for Reminders
I examine the interaction between present-bias and limited memory. Individuals in the model must choose when and whether to complete a task, but may forget or procrastinate. Present-bias expands the effect of memory: it induces delay and limits take-up of reminders. Cheap reminder technology can bound the cost of limited memory for time-consistent individuals but not for present-biased individuals, who procrastinate on setting up reminders. Moreover, while improving memory increases welfare for time-consistent individuals, it may harm present-biased individuals because limited memory can function as a commitment device. Thus, present-biased individuals may be better off with reminders that are unanticipated. Finally, I show how to optimally time the delivery of reminders to present-biased individuals.
Keith Marzilli Ericson; On the Interaction of Memory and Procrastination: Implications for Reminders, Deadlines, and Empirical Estimation, Journal of the European Economic Association, Volume 15, Issue 3, 1 July 2017, Pages 692–719, https://doi.org/10.1093/jeea/jvw015