Good Intentions Pave the Way to... the Local Moneylender

Lutz Arnold () and Benedikt Booker

No 126, Working Papers from Bavarian Graduate Program in Economics (BGPE)

Abstract: Microborrowers may take usurious loans to repay a loan taken from a micro nance institution because of having neglected the time inconsistency of optimal plans or having discounted future payoffs too strongly from the ex-post perspective. Microfinance programs should strive at preventing such consequences of bounded rationality.

Keywords: microfinance; hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: D91 G21 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2012-09
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https://bgpe.cms.rrze.uni-erlangen.de/files/2023/0 ... ocal-Moneylender.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:bav:wpaper:126_arnoldbooker

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