Reinterpreting Delay and Procrastination

TL;DR

This paper models how rational agents with endogenous deadline pressure and resource constraints exhibit procrastination behaviors, influenced by risk, utility, and uncertainty about future opportunities.

Contribution

It introduces a novel model linking risk preferences, liquidity, and deadline pressure to explain procrastination as overestimation of future spending desires.

Findings

Agents smooth consumption when far from deadline

Procrastination arises as deadline approaches due to uncertainty

Correlation aversion influences resource spending behavior

Abstract

I model a rational agent who experiences endogenous deadline pressure in the face of a fixed future deadline. The agent holds a resource stock, and opportunities to spend resources arise randomly according to a Poisson process. When the deadline is far away, the agent smooths consumption, but as the deadline approaches, the agent prioritizes current spending because of uncertainty about the future. The combination of concave utility and the agent's liquidity induces correlation aversion. Connecting the agent's risk and time preference is intuitive and leads to a model of procrastination where the agent overestimates their desire to spend resources.