Arbeitspapier

Time Inconsistency and Retirement Choice

Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a different set of conclusions. We show that if financial planning is enriched to include the choice of when to retire, then naïve hyperbolic discounters may borrow far less and start saving for retirement significantly earlier than exponential discounters.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 5208

Classification
Wirtschaft
Optimization Techniques; Programming Models; Dynamic Analysis
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Subject
hyperbolic discounting
naiveté
retirement choice
time inconsistency
life-cycle consumption and saving

Event
Geistige Schöpfung
(who)
Findley, T. Scott
Caliendo, Frank N.
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2015

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Findley, T. Scott
  • Caliendo, Frank N.
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2015

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