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Title:	Instantaneous Gratification
Author:	Laibson, David I.; Harris, Christopher Note: Order does not necessarily reflect citation order of authors.
Citation:	Harris, Christopher and Dan Laibson. Forthcoming. Instantaneous gratification. Quarterly Journal of Economics.
Full Text & Related Files:	Instantaneous_Grat_Laibson_Harris_Jun12.pdf (586.9Kb; PDF)
Abstract:	Extending Barro (1999) and Luttmer & Mariotti (2003), we introduce a new model of time preferences: the instantaneous-gratification model. This model applies tractably to a much wider range of settings than existing models. It applies to both complete- and incomplete-market settings and it works with generic utility functions. It works in settings with linear policy rules and in settings in which equilibrium cannot be supported by linear rules. The instantaneous-gratification model also generates a unique equilibrium, even in infinite-horizon applications, thereby resolving the multiplicity problem hitherto associated with dynamically inconsistent models. Finally, it simultaneously features a single welfare criterion and a behavioral tendency towards overconsumption
Other Sources:	http://www.economics.harvard.edu/faculty/laibson/files/Instantaneous_Grat_Laibson_Harris_Jun12.pdf
Terms of Use:	This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page:	http://nrs.harvard.edu/urn-3:HUL.InstRepos:9918802

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  Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University

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