When solving discrete-time consumption models with present-biased time preferences, backwards induction generates equilibria that are non-robust in the sense that policy functions are often sensitive to parameter choices, including the modeler's choice of the time-step. The current paper...

Agents with more experience make better choices. We measure learning dynamics using a panel with four million monthly credit card statements. We study add-on fees, specifically cash advance, late payment, and overlimit fees. New credit card accounts generate fee payments of $15 per month....

Reference-dependent preferences / Ted O'Donoghue, Charles Sprenger -- Psychology-based models of asset prices and trading volume / Nicholas Barberis -- Behavioral household finance / John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian -- Behavioral corporate finance / Ulrike...

Introduction to the series -- Preface -- Intertemporal choice -- Errors in probabilistic reasoning and judgment biases -- Errors in strategic reasoning -- Behavioral inattention -- Behavioral development economics -- Behavioral economics and healthcare markets -- Index.

This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the classical model and...

We assume that perfectly patient agents estimate the value of future events by generating noisy, unbiased simulations and combining those signals with priors to form posteriors. These posterior expectations exhibit as-if discounting: agents make choices as if they were maximizing a stream of...

If individuals have self-control problems, they may take up commitment contracts that restrict their spending. We experimentally investigate how contract design affects the demand for commitment contracts. Each participant divides money between a liquid account, which permits unrestricted...