Abstract

I consider a situation in which workers have present-biased preferences and tend to procrastinate their tasks, but underestimate the degree of self-control problems that they will face in the future. Brocas and Carrillo show that a form of competition always mitigates delay in a setting where agents are perfectly aware of their future self-control problems. However, I show that the introduction of the competition considered in their paper does not necessarily mitigate delay in a setting where agents underestimate the magnitude of their future self-control problems. The intuition is that competition reinforces their belief that they will complete earlier, which undermines their incentive to complete now. This result holds even when there is only one worker who severely underestimates the degree of his or her future self-control problem, suggesting that the mere existence of a single “irrational” agent can undermine the overall performance of organizations. Moreover, the intuition behind my result implies that, to mitigate procrastination, it is important to design schemes in which workers believe that they will not complete early in the future, e.g., reducing competition over time, increasing cost over time, or even enforcing no work day tomorrow.