This study extends the Rational Addiction theory by introducing an endogenous discounting of future utilities. The discount rate depends on habits accumulation over time which occur because of the repeated consumption of an addictive good. The endogeneity of the discount rate affects consumption...

When the discount rate is uncertain, individuals whose preferences are consistent with discounted expected utility, exhibit diminishing impatience. This paper introduces and characterizes a variation of discounted expected utility in which the discount rate depends on the state of the nature...

I examine the circumstances under which a sophisticated time-inconsistent decisionmaker (i) will not or (ii) need not severely miscoordinate her behavior across time, in the sense of following a course of action which fails to be Pareto-optimal for the sequence of temporal selves of the...

We propose to analyse the hyperbolic discounting preferences effect on the innovator's research investment decision. Investing in research allows him to acquire information, and then to reduce the uncertainty of the risks of his project. We find that whatever the innovator's preferences, that is...

Time-consistent valuations (i.e. pricing operators) can be created by backward iteration of one-period valuations. In this paper we investigate the continuous-time limits of well-known actuarial premium principles when such backward iteration procedures are applied. This method is applied to an...

In this paper, we continue our study on a general time-inconsistent stochastic linear-quadratic (LQ) control problem originally formulated in Hu, Jin and Zhou (2012). We derive a necessary and sufficient condition for equilibrium controls via a flow of forward-backward stochastic differential...

The paper presents a dynamic theory for time-inconsistent problems of optimal stopping. The theory is developed under the paradigm of expected discounted payoff, where the process to stop is continuous and Markovian. We introduce equilibrium stopping policies, which are implementable stopping...

In this paper, several flaws of the basic no-capital/labor-only New Keynesian model are discussed. Some flaws were left undiscovered because mass of varieties n in Dixit-Stiglitz aggregator is often considered as not affecting overall outcomes. Only when n=1 would ordinary results of the basic...

Why do some people think they will behave differently in the future? Building on research on dynamic inconsistency and age related preferences, this paper introduces the concept that inconsistent intertemporal preferences are directly related to age. In previous studies, standard socioeconomic...