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Smith, Trenton G.; Tasnádi, Attila - EconWPA - 2005

Economic theories of rational addiction aim to describe consumer behavior in the presence of habit-forming goods. We provide a biological foundation for this body of work by formally specifying conditions under which it is optimal to form a habit. We demonstrate the empirical validity of our...

Persistent link: https://www.econbiz.de/10005135026

Option Exercise with Temptation

Miao, Jianjun - EconWPA - 2004

This paper analyzes an agent¡¯s option exercise decision under uncertainty. The agent decides whether and when to do an irreversible activity. He is tempted by immediate gratification and suffers from self-control problems. This paper adopts the Gul and Pensendorfer self- control utility...

Persistent link: https://www.econbiz.de/10005135114

Commitment and Self-Control

Noor, Jawwad - EconWPA - 2005

The literature on self-control problems has typically concentrated on immediate temptations. This paper studies a Gul and Pesendorfer (2001, 2004) style model in which decision-makers are affected by temptations that lie in the future. While temptation is commonly understood to give rise to a...

Persistent link: https://www.econbiz.de/10005413267

Temptation, Welfare and Revealed Preference

Noor, Jawwad - EconWPA - 2005

Choice may be determined both by a consideration of one's welfare (normative preference) and by desires (temptation preference). To provide foundations for such a theory, Gul and Pesendorfer (2001, 2004) adopt a preference over choice problems as a primitive and hypothesize that temptation...

Persistent link: https://www.econbiz.de/10005413275

Rosca Participation in Benin : a Commitment Issue

Dagnelie, Olivier; LeMay, Philippe - EconWPA - 2005

In the light of first-hand data from a Beninese urban household survey in Cotonou, we investigate several motives aiming to explain participation in Rotating Savings and Credit ASsociations. We provide empirical findings which indicate that individuals use their participation in a rosca as a...

Persistent link: https://www.econbiz.de/10005118704

Housing, Household Portfolio, and Intertemporal Elasticity of Substitution: Evidence from the Consumer Expenditure Survey

Hasanov, Fuad - EconWPA - 2005

This paper investigates whether the inclusion of housing in a household portfolio is important to the household’s intertemporal decision making. Households hold portfolios of assets rather than a Treasury bill and/or a stock index and make their spending decisions based on expected total...

Persistent link: https://www.econbiz.de/10005126248

The Rate of Interest or the Rate of Return: Estimating Intertemporal Elasticity of Substitution

Dacy, Douglas; Hasanov, Fuad - EconWPA - 2005

This paper investigates whether the rate of interest such as the Treasury bill rate or the rate of return such as the return on a household portfolio is more relevant to the household’s intertemporal decision making. In a current era, households are diversifiers (to use Tobin’s 1958 term)...

Persistent link: https://www.econbiz.de/10005126444

Pension Contributions as a Commitment device: evidence of sophistication among time-inconsistent households

Sourdin, Patricia - EconWPA - 2005

Sophisticated agents with self-control problems value commitment devices that constrain future choices. Using Australian household data, I test whether these households value commitment devices in the form of illiquid pension contributions. Applying various probabilistic choice models, the...

Persistent link: https://www.econbiz.de/10005556890

Does Competition Affect Giving? An Experimental Study

Duffy, John; Kornienko, Tatiana - EconWPA - 2005

We explore whether natural human competitiveness can be exploited to stimulate charitable giving in a controlled laboratory experiment involving three different treatments of a sequential ``dictator game.'' Without disclosing the actual amounts given and kept, in each period players are publicly...

Persistent link: https://www.econbiz.de/10005062728

Does Motivation Trigger Autonomy, or Vice Versa?

Petrova, Kameliia - EconWPA - 2005

motivated? A standard result in economics is that firms offer autonomous jobs to promote worker motivation. But surprisingly … motivates them. Does autonomy in fact trigger motivation? I argue in this study that motivation may trigger autonomy, and thus … motivation, and that motivated workers have a lower cost of processing information than unmotivated ones. While motivated workers …

Persistent link: https://www.econbiz.de/10005407531