Economics valiantly tries to explain every seemingly uneconomic phenomenon with a bunch of optimization problems. Behavioral economics is one of the newest lieutenants of the subject, which bridges the gap between the ideal, utility-maximizing man and his real life imperfect counterpart. Perhaps, the very beauty of the subject lies in finding logical explanations for seemingly irrational behavior of agents.
What I try to explore in this article, is the reasoning behind the irrationality that stumps nearly every rational agent: the question of twisted inter-temporal tradeoffs. People tend to overly discount future benefits, under the deceptive veil of “the power of now”.
“Never put off till tomorrow what may be done day after tomorrow just as well” said none other than Mark Twain. Procrastination, without any offence, is a global phenomenon, its close cousins being impulsive risk-taking, extravagance and addiction.
As a first cut, procrastination can be defined as the tendency of agents to delay their investments due to some temporary preference for inconsequential, immediate benefits over larger future benefits. A major reason given for procrastination in most surveys is ‘aversiveness of the task at hand’, meaning the task at hand in present, is unpleasant. The fact that makes this phenomenon puzzling is precisely that people tend to be perfectly aware of their actions when they choose to procrastinate. More so, they do not tend to learn from their mistakes and procrastinate again in the next time period, meaning that ‘regret’ simply does not seem to be costly enough to deter them.
Modeling procrastination into an economic framework could be a very taxing job, riddled with assumptions. Most of the recent works that try to model procrastination use two approaches.
In the first approach, people are assumed to have inter-temporal preference inconsistency, where they choose not to invest in the current time period, giving more weight to current benefits, but subsequently reverse these very preferences, meaning they panic and regret over their past choices (THAT one hour before an exam).
In the other approach, people are assumed to have time consistent preferences and simply lack the necessary resources to assess the potential cost of their actions.
Harvard studies say that most people get trapped in the lure of the ‘call of the present’ due to a lack of the strength of their pre-commitment. That would explain the pull of the wafting scent of delicious food right when you have planned out your diet, the temptation that ultimately gets to rule over all your hard work and meticulous planning. The studies say that this sensation can be explained biologically; by the way the human brain works.
So how does an agent overcome this deceit of temptation? Is pre-commitment an option at all? This can be better explained through the first approach, which also seems to be closer to reality for the average procrastinator. The problem reduces to one of exercising self-control. So simply put, do not put yourself in a situation where you have to put your self-control to test. If the impulse of checking your newly arrived text message tends to shadow your concentration, put the phone away. If you simply cannot resist the pull of your favorite restaurant, avoid the route that makes you walk past its front doors. Needless to say, such voluntary exercise of self restraint would require some great strength of character. If the person has such a commendable conscience, why would he procrastinate in the first place? If he did, he wouldn’t end up wallowing in regret as he does, knowing that his nerves of steel would ride him through the worst.
The more subtle aspects of behavioral economics come into picture when one tries to compare the efficiency of such self imposed constraints and that of constraints imposed by an external mechanism. Two extensive pilot studies in this respect were carried out in the Massachusetts Institute of Technology (MIT) by behavioral economist Dan Ariely and his colleague Klaus Wertenbroch, on the submission of term papers by students on a semester long course. In three different classes, Professor Ariely respectively gave his students the options of imposing a self-selected deadline with only a final date of submission of papers, no deadline at all with the condition that they could turn in their papers any time before the last class of the term, and three sets of firm deadlines, with no flexibility whatsoever. On comparing the overall performance of these three classes, it was found that the class which had to bear the brunt of the undemocratic treatment in fact, got the best grades, the one with no constraints at all fared the worst and the one which had the option of choosing self-selected constraints finished in the middle. He sums up by noting that a dictatorial therapy seems to be the best for procrastination, though self-control does seem to be moderately effective. This tells us that procrastinators often cannot identify the optimal deadlines that would elicit the best outcome from them.
So, what is the bottom line? Is hiring a martinet to keep checks and balances on your behavior the only cure for procrastination? It seems to defy our fundamental right to liberty. Well, the answer could be to have a hypothetical martinet. One could let someone don the robe of a dictator to regulate one’s behavior, with penalties that are costly enough to deter noncompliance. For instance, one could pay an amount upfront to a ‘trustworthy’ friend, and ask him not to return the amount unless one’s pre-committed deadline is met.
The alternative approach of studying procrastination with time consistent preferences is more onerous and perhaps aversive enough to motivate procrastination. The crux of the study however, depends on the fact that people have positive time preference for leisure, much like the earlier approach. According to this, task aversiveness makes the marginal utility of leisure rise faster than the rate of discount of future benefits. This very ‘impatience’ is the culprit behind procrastination.
Given the universal appeal of the phenomenon, ‘procrastination’ as a topic of research has garnered a lot of attention, especially in the recent years. Much of it echoes what the uneconomic mind already knows about ‘opportunity’s assassin’, but some models put forth even ‘irrational’ utility maximizing conclusions about the same, within a dynamic optimization framework.
 ‘Predictably Irrational’ by Dan Ariely has a lot to say in this respect
 A good time to remember David Laibson’s ‘pull of instant gratification’
 Investments could be in units of time per se, or even abstention from certain kinds of intrinsically undesirable behavior, like drinking alcohol or taking drugs
 A similar view was taken by Akerlof (1991), that the ‘saliency’ of costs and benefits changes over time
 For a formal mathematical explanation of the same, one could refer to ‘Read this Paper Later: Procrastination with time consistent preferences’ by Carolyn Fischer