This paper studies an optimal taxation problem under the assumption that consumers have time-inconsistent preferences for immediate gratification. Because of that, consumers consciously overconsume one good, and regret later for the lack of self-control that has generated excessive consumption....

We analyze sequential ascending auctions with budget cons- trained bidders and relax the standard hypothesis that bidders cannot bid above their budget. In equilibrium, a bidder may choose to overbid — i.e., bid above his budget — in an early auction in order to deplete his rival and hence...