Arbeitspapier
Subsidizing Health-Conscious Behavior Now or Later
In a model where consumers have quasi-hyperbolic preferences, we compare immediate subsidies paid for health-conscious consumption and future subsidies rewarding good health outcome. We characterize the subsidy rates which implement the unbiased choice. These rates differ because of two countervailing effects: (1) the individual applies quasi-hyperbolic discounting to future subsidy receipts, and (2) she can use the future subsidy to partially correct her own future behavior. We further show that future subsidies result in higher costs for a government which discounts exponentially. However, this result does not necessarily hold if the government itself is formed by time-inconsistent individuals.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 5734
- Classification
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Wirtschaft
Fiscal Policies and Behavior of Economic Agents: Household
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Health: Government Policy; Regulation; Public Health
- Subject
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present-bias
quasi-hyperbolic discounting
paternalism
health
- Event
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Geistige Schöpfung
- (who)
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Danilowicz-Gösele, Kamila
Schwager, Robert
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2016
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Danilowicz-Gösele, Kamila
- Schwager, Robert
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2016
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