Extending Barro (1999) and Luttmer & Mariotti (2003), we introduce a new model of time preferences: the instantaneous-gratiï¬cation model. This model applies tractably to a much wider range of settings than existing models. It applies to both complete- and incomplete-market settings and it...

Bernanke (2005) hypothesized that a “global savings glut†was causing large trade imbalances. However, we show that the global savings rates did not show a robust upward trend during the relevant period. Moreover, if there had been a global savings glut there should have been a large...

Hyperbolic discount functions induce dynamically inconsistent preferences, implying a motive for consumers to constrain their own future choices. This paper analyzes the decisions of a hyperbolic consumer who has access to an imperfect commitment technology: an illiquid asset whose sale must be...

We derive the ï¬rst closed-form optimal reï¬nancing rule: Reï¬nance when the current mortgage interest rate falls below the original rate by at least \(\frac{1}{ψ}\)[φ + W (− exp (−φ))]. In this formula W(.) is the Lambert W-function, ψ = \(\frac{2 (Ï +...

Background: Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function. Methods: Using data from 369...

Background: The objective of this study was to test the hypothesis that cognitive function is negatively associated with temporal discounting in old age. Methods Participants were 388 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing...

OBJECTIVES: We explain why traits of interest to behavioral scientists may have a genetic architecture featuring hundreds or thousands of loci with tiny individual effects rather than a few with large effects and why such an architecture makes it difficult to find robust associations between...

People have present-biased preferences: they choose more impatiently when choosing between an immediate reward and a delayed reward, than when choosing between a delayed reward and a more delayed reward. Following McClure et al. [McClure, S.M., Laibson, D.I., Loewenstein, G., Cohen, J.D. (2004)....