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 consider a class of additively time-separable life-cycle consumption-savings models with iso-elastic per period power utility featuring resistance to inter-temporal substitution of θ with linear consumption policy functions. The utility maximization problem is dynamically inconsistent for...

Most economic models assume that time preferences are stable over time, but the evidence on their long-term stability is lacking. We study whether and how time preferences change over the life cycle, exploiting representative long-term panel data. We provide new evidence that discount rates...

Planning for retirement and subsequent execution of the plan are difficult, but essential for financial security in old age. To formally analyse the interplay between planning and self-control, I introduce cognitive costs of formulating a plan into the dual-self model of impulse control. The...

Planning for retirement is difficult, but essential for future financial security. To formally analyse the interplay between planning and self-control, I introduce cognitive costs of formulating a plan into the two-system model of impulse control. The resulting possibility of rational inaction...

I study the consumption-saving problem with non-separable utility under ambiguity. Using smooth ambiguity aversion, I show that the introduction of ambiguity and greater ambiguity aversion raise optimal saving. When relative prudence in ambiguity preferences is bounded by 2, also greater...

This paper studies the response of saving decisions to two alternative capital taxation, i.e., wealth tax and capital income tax. I conduct a "life-cycle" experiment on Amazon Mturk, where subjects make dynamic saving decisions. Subjects exhibit an overreaction to the wealth tax, not to the...

This paper documents extensive commitment to mandatory debt repayment. In a natural experiment in which households can apply for free mortgage-payment flexibility for one to twelve months, 43 percent of applicants choose a dominated option of short flexibility. I argue that short flexibility...