Development Economics X Paper Model Twenty-Four
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We study how intertemporal selves and self-regulation affect the division of labor among heterogeneous agents. We build on the literature that models agents as collections of multiple selves with different preferences, skills, and beliefs over time. We introduce self-regulation as a costly effort that agents can exert to resist temptations and stick to their optimal plans. We show that our model can generate both specialization and diversification in task allocation, depending on the nature of tasks and the characteristics of agents. We also analyze how self-regulation influences the distribution of income and welfare among agents, and how it can be affected by external interventions or incentives. We end by presenting the concepts of aggregation of labor and generalization. We demonstrate that tasks that are complex, interdependent, complementary, or indivisible may be better suited to labor aggregation, while tasks that are simple, independent, substitutable, or modular may be better suited to labor division. Also, agents with high preference or temptation parameters or those operating in uncertain, volatile, diverse, or dynamic environments may benefit from generalization, while agents with low preference or temptation parameters or those operating in certain, stable, homogeneous, or static environments may benefit from specialization.
Opoku-Agyemang, Kweku (2023). "Intertemporal Selves, Self-Regulation, and Task Allocation." Development Economics X Paper Model Twenty-Four.
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