On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents

Jean-Pierre Drugeon and Bertrand Wigniolle

Revue d'économie politique, 2019, vol. 129, issue 5, 715-740

Abstract: This article considers the long-run equilibrium distribution of an economy populated by heterogenous and present biased quasi-hyperbolic discounting agents. In a first configuration with logarithmic utility functions and Cobb-Douglas production technologies, this article establishes the existence and the uniqueness of the equilibrium : only one agent, determined by the highest value of a coefficient building from both the degree of present bias and the rate of discount, will have a positive long-run consumption and a positive long-run wealth. A second configuration with constant elasticities of substitution utilities and linear production technologies is then considered. This article similarly establishes the existence and the uniqueness of the equilibrium. There generically is a unique agent with the highest growth rate for his consumption and his wealth. This agent is determined by both preferences and technology parameters and may change following a technological shock.

Keywords: Heterogeneities; quasi-hyperbolic discounting; linear decision rules (search for similar items in EconPapers)
Date: 2019
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Related works:
Working Paper: On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents (2019)
Working Paper: On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents (2019)
Working Paper: On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents (2018)
Working Paper: On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents (2018)
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