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 …

, the strength of temptation and the cost of self-control do not affect the extensive margin. Hence, present …

over-spend on a commodity for which they experience temptation (TP good). Resisting that temptation gives rise to a utility … short of) the marginal valuation of leisure that arises if the consumer would succumb to the temptation. We use iso …