Golden Eggs and Hyperbolic Discounting
TLDR
The authors analyzes the decisions of a hyperbolic consumer who has access to an imperfect commitment technology: an illiquid asset whose sale must be initiated one period before the sale proceeds are received.Abstract:
Hyperbolic discount functions induce dynamically inconsistent preferences, implying a motive for consumers to constrain their own future choices. This paper analyzes the decisions of a hyperbolic consumer who has access to an imperfect commitment technology: an illiquid asset whose sale must be initiated one period before the sale proceeds are received. The model predicts that consumption tracks income, and the model explains why consumers have asset-specific marginal propensities to consume. The model suggests that financial innovation may have caused the ongoing decline in U. S. savings rates, since financial innovation in- creases liquidity, eliminating commitment opportunities. Finally, the model implies that financial market innovation may reduce welfare by providing âtoo muchâ liquidity.read more
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Separate Neural Systems Value Immediate and Delayed Monetary Rewards
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References
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Myopia and Inconsistency in Dynamic Utility Maximization
TL;DR: In this article, the authors present a problem which has not heretofore been analysed and provide a theory to explain, under different circumstances, three related phenomena: (1) spendthriftiness; (2) the deliberate regimenting of one's future economic behaviour, even at a cost; and (3) thrift.
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Uninsured Idiosyncratic Risk and Aggregate Saving
TL;DR: In this article, the authors present a qualitative and quantitative analysis of the standard growth model modified to include precautionary saving motives and liquidity constraints, and address the impact on the aggregate saving rate, the importance of asset trading to individuals, and the relative inequality of wealth and income distributions.
Journal ArticleDOI
Mitigation and Adaptation Strategies for Global Change
TL;DR: A forum to review, analyze and stimulate the development, testing and implementation of mitigation and adaptation strategies at regional, national and global scales as mentioned in this paper, which contributes to real-time policy analysis and development as national and international policies and agreements are discussed.
Journal ArticleDOI
Specious reward: a behavioral theory of impulsiveness and impulse control.
TL;DR: This work has shown that impulsiveness seems to be best accounted for by the hyberbolic curves that have been found to describe the decline in effectiveness of rewards as the rewards are delayed from the time of choice.
Journal ArticleDOI
Relative and absolute strength of response as a function of frequency of reinforcement
TL;DR: The present experiment is a study of strength of response of pigeons on a concurrent schedule under which they peck at either of two response-keys and investigates output as a function of frequency of reinforcement.