preferences featuring temptation and self-control. The model can capture two contrasting views: the positive view, which links … increase in indebtedness. The welfare implication is strikingly dif- ferent from the standard model without temptation, which … welfare gains from a tighter borrowing limit than in 2000s, theoptimal borrowing limit is tighter according to the temptation …

This paper studies the optimal trade-off between commitment and flexibility in an intertemporal consumption … value for flexibility - but also expect to suffer from temptations - generating a value for commitment. The model combines … the representations of preferences for flexibility introduced by Kreps (1979) with its recent antithesis for commitment …

-specific budgets depends on the combination of a demand for commitment and the demand for flexibility resulting from uncertainty about … with minimum-savings rules (another widely-studied form of commitment), and how budgeting depends on the intensity of self …