The thesis consists of an introductory part and four self-contained papers. Paper [I] theoretically analyzes how the level and uncertainty of future prospects affect incentives to abstain from sexual risk taking in the presence of HIV. The results suggest that, for individuals with limited...

Analysis of an original, broad, internet-based survey reveals that debt holding is related to three aspects of time discounting: (i) present bias, measured by the degree of declining impatience in the generalized hyperbolic discount function; (ii) borrowing aversion, captured by a sign effect -...

Time preferences can affect divorce probability both affecting the quality of the match and affecting the spouses' reactions to negative shocks. We analyze the relationship between time preferences and divorce decisions using data from the Italian Survey on Household Income and Wealth, which...

This paper investigates how loss-aversion affects individuals' decisions on savings and insurance purchase. Specifically, this paper empirically tests if prospect theory's loss aversion decreases insurance demand and increases savings demand. Prospect theory predicts that boundedly rational...

People’s value for their own time is a key input in evaluating public policies: evaluations should account for time taken away from work or leisure as a result of policy. Using rich choice data collected from farming households in western Kenya, we show that households exhibit non-transitive...

An individual’s decision about how much to save depends on her perception of how current savings affects future well-being. Fatalistic individuals believe that they have little or no control over future outcomes. We develop a theoretical model linking fatalism to savings and test the...

Both in the field and in the lab, participants frequently cooperate, despite the fact that the situation can be modelled as a simultaneous, symmetric prisoner's dilemma. This experiment manipulates the payoff in case both players defect, and explains the degree of cooperation by a combination of...

A common premise in both the theoretical and policy literatures on development is that people remain poor because they are too impatient to save and too risk averse to take the sort of chances needed to accumulate wealth. The empirical literature, however, suggests that this assumption is far...