Quasi-hyperbolic discounting and externalities: Can government intervention improve wefare?

Konferenzbeitrag

The recent literature has emphasized that government intervention when consumers have quasi-hyperbolic preferences ('bias for the present') over consumption is not welfare-enhancing. This paper introduces a market imperfection (which takes the form of a negative externality) and shows that government intervention is welfare-enhancing if the market imperfection is sufficiently strong or the consumers' bias for the present is weak. This conclusion holds, interestingly, even if the gocernment and the consumers share the same biased intertemporal preferences.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Intertemporal Household Choice; Life Cycle Models and Saving
• Subject: Quasi-hyperbolic preferences ; optimal savings ; bias for the present ; time consistent policy ; externalities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kotsogiannis, Christos ; Schwager, Robert
• Event: Veröffentlichung
• (who): ZBW - Leibniz Information Centre for Economics
• (where): Kiel, Hamburg
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/224593
• Last update: 10.03.2025, 11:41 AM CET