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To answer these questions, we develop and calibrate a heterogeneous. Abstract empirically observed intertemporal choices about money have long been thought to exhibit present bias, i.e. This paper analyzes consumption and savings of households, who may engage in myopic excess consumption due to present bias, but can also allocate funds into illiquid.
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One with standard preferences and another with present bias. Next, we show both numerically and analytically. By recasting present bias in continuous time, this paper develops both the analytical and the.
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We do so in the following steps. Households with sufficient present bias will partially or fully deplete these rollover iras before retirement. First, we set up two different ha models:
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It is natural to ask whether and to what extent present bias alters the potency of these policy tools.
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