We study optimal contracting by a monopolistic seller of an investment good to a time-inconsistent consumer and, in doing so, introduce asymmetric information to the model of DellaVigna and Malmendier (2004). We find: (1) the below-marginal-cost-pricing rule may fail for a low-value consumer;...

This paper develops a revealed preference methodology for exploring whether time inconsistencies in household choice are the product of nonstationarities at the individual level or the result of individual heterogeneity and renegotiation within the collective unit. An empirical application to...

We report on a field study demonstrating systematic differences between the preferences people anticipate they will have over a series of options in the future and their subsequent revealed preferences over those options. Using a novel panel data set, we analyze the film rental and return...

Permit markets are celebrated as a policy instrument since they allow (i) firms to equalize marginal costs through trade and (ii) the regulator to distribute the burden in a politically desirable way. These two concerns, however, may conflict in a dynamic setting. Anticipating the regulator's...