Experimental choice data from 881 subjects based on 40 time-tradeoff items and 32 risky choice items reveal that most subjects are time-inconsistent and most violate the axioms of expected utility theory. These inconsistencies cannot be explained by well-known theories of behavioral...

This paper addresses the question of whether the findings of behavioral economics imply that techniques used in cost-benefit analysis should be modified. The findings of behavioral economics considered include the status-quo effect, loss-aversion, overconfidence and hyperbolic discounting. These...

Employers are increasingly adopting workplace wellness programs designed to improve employee health and decrease employer costs associated with health insurance and job absenteeism. This paper examines the outcomes of 2635 workers across 24 worksites who were offered financial incentives for...

Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a different set of conclusions. We show that if financial planning is enriched to include...

People across the developing world join rotational savings and credit associations (roscas) to fund repeated purchases of nondivisible goods. When the scope for punishment is weak, there is a natural question about why agents do not defect from these groups. I model a rosca as a commitment...

I study the provision of commitment savings by informal banks to sophisticated hyperbolic discounters. Since a consumer is subject to temptation in the period that he signs a contract, banks might exploit his desire for instant gratification even as they help him to commit for the future....

We extend the classic Merton (1969, 1971) problem that investigates the joint consumption-savings and portfolio-selection problem under capital risk by assuming sophisticated but time-inconsistent agents. We introduce stochastic hyperbolic preferences as in Harris and Laibson (2013) and find...

We propose a solution concept for games that are played among hyperbolic discounters that are possibly naive about their own, or about their opponent's future time inconsistency. Our perception-perfect equilibrium essentially requires each player to take an action consistent with the subgame...

Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a different set of conclusions. We show that if financial planning is enriched to include...

We present a critique of Behavioral Economics, the dominant approach to reforming the regulation of retail credit, and propose a new approach to managing uncertainty in consumer lending. This new approach draws on a different model of decision-making, Distributed Cognition, to improve contract...