Consumption–Savings Decisions with Quasi–Geometric Discounting | Zendy

Krusell Per | Zendy; Smith, Jr. Anthony A. | Zendy

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Consumption–Savings Decisions with Quasi–Geometric Discounting

Author(s) -

Krusell Per,

Smith, Jr. Anthony A.

Publication year - 2003

Publication title -

econometrica

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.7

H-Index - 199

eISSN - 1468-0262

pISSN - 0012-9682

DOI - 10.1111/1468-0262.00400

Subject(s) - citation , consumption (sociology) , library science , discounting , operations research , economics , sociology , computer science , social science , mathematics , finance

How do individuals with time-inconsistent preferences make consumption-savings decisions? We try to answer this question by consideringthe simplest possible form of consumption-savings problem,assuming that discounting is quasi-geometric. A solution to the decisionproblem is then a subgame-perfect equilibrium of a dynamicgame between the individual's #successive selves". When the timehorizon is #nite, our question has a well-de#ned answer in terms ofprimitives. When the time horizon is...

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