We investigate the feasibility of inferring the choices people would make (if given the opportunity) based on their neural responses to the pertinent prospects when they are not engaged in actual decision making. The ability to make such inferences is of potential value when choice data are...

We introduce the concept of financial competence, a measure of the extent to which individuals' financial choices align with those they would make if they properly understood their opportunity sets. Unlike existing measures of the quality of financial decision making, the concept is firmly...

The absence of self-control is often viewed as an important correlate of persistent poverty. Using a standard intertemporal allocation problem with credit constraints faced by an individual with quasi- hyperbolic preferences, we argue that poverty damages the ability to exercise self-control....

We examine democratic policy-making in a simple institution with real-time agenda setting. Individuals are recognized sequentially. Once recognized, an individual makes a proposal, which is immediately put to a vote. If a proposal passes, it supercedes all previously passed proposals. The policy...

Over the last forty years, the majority of states have adopted consumer education policies, and a sizable minority have specifically mandated that high school students receive instruction on topics related to household financial decision-making (budgeting so forth). In this paper, we attempt to...

This paper discusses several competing proposals for general normative frameworks that would encompass non-standard models of choice. Most existing proposals equate welfare with well-being. Some assume that well-being flows from the achievement of well-defined objectives, and that those...

Default contribution rates for 401(k) pension plans powerfully influence workers’ choices. Potential causes include opt-out costs, procrastination, inattention, and psychological anchoring. We examine the welfare implications of defaults under each of these theories. We show how the optimal...

This paper provides evidence concerning the extent to which consumers of liquor employ precommitment devices. One widely recommended precommitment strategy is to regulate alcohol consumption by deliberately manipulating availability. We assess the prevalence of the "availability strategy" by...

We study the characteristics of self-selected candidates in corrupt political systems. Potential candidates differ along two dimensions of unobservable character: public spirit (altruism toward others) and honesty (the disutility suffered when selling out to special interests after securing...

This paper presents new empirical evidence in support of the view that a significant fraction of total saving is motivated solely by the desire to leave bequests. Specifically, I find that Social Security annuity benefits significantly raise life insurance holdings and depress private annuity...