We study the role of expectations of naive agents in a general equilibrium version of the Ramsey model with quasi-hyperbolic discounting. When agents recognize others' naivete, as strongly suggested by empirical evidence, they revise consumption paths, correctly anticipating prices in a...

We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second,...

This study uses a simple theory model to examine how time preferences influence food choices made by individuals, which in turn have implications for their future health. The theory results demonstrate that individuals with higher bias for the present or lower patience will have poorer health...

We take into account that envy (relative consumption concerns) is more pronounced in the present than in the future. We consider a Ramsey-type model in which agents differ only in their initial capital endowments but are identical in their exogenous parameters. Agents' preferences exhibit...

We investigate how a resource user who is present-biased manages a renewable resource stock with variable growth that could undergo a reversible regime shift (an abrupt, persistent change in structure and function of the ecosystem supplying the resource). In a discrete-time quasihyperbolic...

The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition path of a country's saving rate exhibits a rising or non-monotonic pattern. In important...

The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition paths of most countries saving rates exhibit a statistically significant hump-shaped...

This paper provides the exact analytical solution for the standard model of endogenous growth when consumers have present-biased preferences and make time-inconsistent savings plans, which they revise continuously. It is shown that long-run growth is not necessarily lower under present-biased...

On average, young people underestimate whereas old people overestimate their chances to survive into the future. We employ a subjective survival belief model proposed by Ludwig and Zimper (2013), which can replicate these patterns. The model is compared with hyperbolic discounting within a...

The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition paths of most countries' saving rates exhibit a statistically significant hump-shaped...