The life-cycle theory of saving behavior (Modigliani, 1988) suggests that humans strive towards an equal intertemporal … distribution of wealth. However, behavioral life-cycle theory (Shefrin & Thaler, 1988) proposes that people use self control … heuristics to postpone wealth until later in life. According to this theory, people use a system of cognitive budgeting known as …

evidence for inter-temporal arbitrage among financially literate respondents, thereby revealing a potential confound in time …