Consumption-savings Decisions with Quasi-geometric Discounting by per Krusell
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منابع مشابه
Consumption and Savings Decisions with Quasi-Geometric Discounting
How do individuals with time-inconsistent preferences make consumption-savings decisions? We try to answer this question by considering the simplest possible form of consumption-savings problem, assuming that discounting is quasi-geometric. A solution to the decision problem is then a subgame-perfect equilibrium of a dynamic game between the individual's \successive selves". When the time horiz...
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How do individuals with time-inconsistent preferences—à la Strotz/Phelps/Pollak/Laibson— make consumption-savings decisions? We try to answer this question by considering the simplest possible form of consumption-savings problem, assuming that discounting is quasigeometric. A solution to the decision problem is then a subgame-perfect equilibrium of a dynamic game between the individual’s “succe...
متن کاملConsumption-Savings Decisions with Quasi-Geometric Discounting
We study the consumption-savings problem of an infinitely-lived, rational consumer who has time-inconsistent preferences in the form of quasi-geometric discounting. The consumer operates a weakly concave production function and must simply divide current resources into current consumption and savings. There is no uncertainty. A solution to the consumer’s problem is a subgame-perfect equilibrium...
متن کاملConsumption-savings Decisions with Quasi-geometric Discounting by per Krusell and Anthony
THE PURPOSE OF THIS PAPER is to study how an infinitely-lived consumer with "quasigeometric" discounting-thought of as represented by a sequence of "selves" with conflicting preferences-would make consumption and savings decisions. In light of experimental evidence suggesting that individuals do not have geometric discount functions (see, for example, Ainslie (1992) and Kirby and Herrnstein (19...
متن کاملGeneralized quasi-geometric discounting
This paper derives the ‘generalized Euler equation’ for an agent with multi-period deviations from geometric discounting. The functional equation that describes optimal consumption-savings decisions involves manipulation of future selves and indirect manipulation of more distant selves through intervening selves. © 2007 Elsevier B.V. All rights reserved.
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