Implementation with individuals’ limited willpower

Official URL: https://risc01.sabanciuniv.edu/record=b2749090_(Table of contents)

This thesis studies the implementation problem under complete information in an environment where agents have limited willpower stocks to exert self-control when faced with temptation. We integrate the limited willpower representation model of Masatlioglu, Nakajima, and Ozdenoren (2020) into the behavioral implementation setting. We present a slight modification of the notion of Nash equilibrium, the concept of Nash equilibrium under willpower, and identify the associated consistency notion, consistency under willpower. We show that consistency under willpower is necessary for implementation under willpower and that it is also a sufficient condition when paired with the economic environment assumption. Moreover, we provide examples to illustrate that the implementation result is not monotonically dependent on the willpower stock variable.