Time Inconsistency and Retirement Choice

T. Scott Findley () and Frank Caliendo

No 5208, CESifo Working Paper Series from CESifo

Abstract: Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a different set of conclusions. We show that if financial planning is enriched to include the choice of when to retire, then naïve hyperbolic discounters may borrow far less and start saving for retirement significantly earlier than exponential discounters.

Keywords: hyperbolic discounting; naiveté; retirement choice; time inconsistency; life-cycle consumption and saving (search for similar items in EconPapers)
JEL-codes: C61 D03 D91 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (20)

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Journal Article: Time inconsistency and retirement choice (2015)
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