Abstract (may include machine translation)
Some people have self-control problems regularly. This paper adds endogenous retirement to Laibson's quasi-hyperbolic discounting savings model [Quarterly Journal of Economics 112 (1997) 443-477]. Earlier selves think that the deciding self tends to retire too early and may save less to induce later retirement. Still earlier selves may think the pre-retirement self does this too much, saving more to induce early retirement. The consumption pattern may be different from that with exponential discounting. Other observational non-equivalence includes the impact of changing mandatory retirement rules or work incentives on savings and a possibly negative marginal propensity to consume out of increased future earnings. Naive agents are briefly considered.
Original language | English |
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Pages (from-to) | 1839-1872 |
Number of pages | 34 |
Journal | Journal of Public Economics |
Volume | 87 |
Issue number | 9-10 |
DOIs | |
State | Published - 1 Sep 2003 |
Externally published | Yes |
Keywords
- Laibson's model
- Quasi-hyperbolic discounting
- Retirement