Present Bias Unconstrained: Consumption, Welfare, and the Present-Bias Dilemma*

• 成果类型: Article
• 署名作者: Maxted, Peter
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjaf030
• 发表日期: 2025
• 页码: 2963-3013
• 关键词: self-control; VISCOSITY SOLUTIONS; MODEL; COMMITMENT; preference; CHOICE; myopia

摘要

By augmenting the continuous-time specification of Harris and Laibson (2013) with the assumption that hard borrowing constraints do not bind in equilibrium, present bias can be tractably incorporated into rich consumption-saving models featuring stochastic income, risky and illiquid assets, and costly borrowing. I present closed-form expressions characterizing how present bias affects consumption, illiquid asset demand, and welfare. This welfare analysis specifies the channels through which present bias can matter for policy and uncovers the present-bias dilemma: present bias can have large welfare costs, but individuals have little ability to alleviate these costs using financial commitment devices like illiquid assets.