Dean Spears
Princeton University
Abstract:
Behavior that responds most to sooner costs and benefits is often interpreted as evidence of impatient time preference. However, apparent impatience could instead be caused by choice technology that finds optimizing over temporally nearer consequences easier. This paper illustrates this possibility with a simple model and applies its theory of bounded intertemporal rationality to the intra-monthly consumption puzzle. An applied model explains stylized facts that theories of time preference cannot. Novel predictions are verified in a field experiment among pension recipients in Cape Town, South Africa. Monthly consumption cycles are concentrated among participants with low cognitive resources and unpredictable circumstances.
Date: September 29, 2011
Time: 03:00 P.M.
Venue:
AMEX Conference Room (Second Floor),
Department of Economics,
Delhi School of Economics,
New Delhi-110007(INDIA)
Location:
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