The Shape of Temptation: Implications for the Economic Lives of the Poor

Abhijit Banerjee and Sendhil Mullainathan

Working Papers from eSocialSciences

Abstract: This paper argues that the relation between temptations and the level of consumption plays a key role in explaining the observed behaviors of the poor. Temptation goods are defined to be the set of goods that gen- erate positive utility for the self that consumes them, but not for any previous self that anticipates that they will be consumed in the future.

Keywords: consumption; poor; temptation goods; interest rates; investment; savings; borrowing; risk-behavior; Euler inequality (search for similar items in EconPapers)
Date: 2010-05
New Economics Papers: this item is included in nep-dev and nep-ltv
Note: Institutional Papers
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Citations: View citations in EconPapers (196)

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Working Paper: The Shape of Temptation: Implications for the Economic Lives of the Poor (2010)
Working Paper: The Shape of Temptation: Implications for the Economic Lives of the Poor (2010)
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