The paper reviews some recent theoretical contributions on the modelisation of time-inconsistent preferences, as well as implications for individual behavior. The focus is on the interpretation of the concepts and the link with concepts in psychology.

This paper attemps to rationalize the use of insurance covenants in financial contracts, and shows how external financing generates a demand for insurance by risk-neutral entrepreneurs. In our model, the entrepreneur needs external financing for a risky project that can be affected by an...