This paper proposes a method and a toolkit for solving optimal policy with imperfect commitment in linear quadratic … monetary policy. We apply our method to the Smets and Wouters (2007) model, where we show that imperfect commitment has …

This paper studies if external commitment devices are effectively capable of helping agents to reduce their consumption … ambiguous effects on individuals' welfare. First, hyperbolic agents purchase commitment devices less often that they wish to … mild level of addiction, commitment devices effectively reduce consumption and improve health status. However, for severe …

the expected gains from trade are low, commitment dominates adaptation, and vice versa. …