Intertemporal Choice

Keith Ericson and David Laibson

No 25358, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Intertemporal tradeoffs play a key role in many personal decisions and policy questions. We describe models of intertemporal choice, identify empirical regularities in choice, and pose new questions for research. The focus for intertemporal choice research is no longer whether the exponential discounted utility model is empirically accurate, but, instead, what models best explain the robust behavioral deviations we observe. We introduce the term “present-focused preferences” to describe the large class of models that prioritize present flows of experienced utility. Present-focused preferences need not coincide with a preference for commitment or dynamically inconsistent preferences. Present-bias is a special case of present-focused preferences.

JEL-codes: C90 D14 D15 D60 D91 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-evo and nep-upt
Note: AG PE
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