His extraordinary proposal takes insights given us by economics into how conflict is resolved and extends them to conflicts of different agencies within a single person, an approach he terms "picoeconomics".

I haven't read Breakdown of Will, but Thomas Schelling makes a similar proposal in his articles on "egonomics".

On the broader question of how to respond to irrationality, I strongly recommend Jon Elster's chapter (including the references) in Explaining Social Behavior.