Identifying Present-Bias from the Timing of Choices

Identification of Time-Inconsistent Models: The Case of Insecticide Treated Nets

“…Unlike our study, they find low compliance rates among agents who chose commitment contracts, and they attribute this to partial naïveté. Heidhues and Strack (2019) provide identification results for partially naïveté in a stopping problem when data on both the stopping probabilities and on the continuation value are available. Martinez et al (2019) adapt their model in the context of filing tax returns and find a non-negligible present-bias (assuming a per-period discount factor δ = 1).…”

Long-Term Contracting with Time-Inconsistent Agents

“…This literature studies the trade-off between commitment and flexibility (agents have commitment power but, because they face an unverifiable taste shock, they value the flexibility to adjust to different taste shocks), whereas, in Section 3.1, we study the agent's incentive to lapse and recontract with other firms. Our paper is also related to Bisin, Lizzeri, and Yariv (2015), who studied the interaction between government policy and private commitments by present-biased voters, Heidhues and Strack (2019), who characterized stopping behavior by time-inconsistent agents, and to Harris and Laibson (2001) and Cao and Werning (2018), who studied the Markov equilibria in infinite-horizon problems with sophisticated consumers and showed there can be multiple non-smooth equilibria. Multiplicity and non-smoothness do not arise in our setting because our model has a finite (albeit arbitrary) horizon.…”

Time Consistent Equilibria in Dynamic Models With Recursive Payoffs and Behavioral Discounting

“…They show that the socially optimum is a approximately a two-tier account system which includes completely illiquid accounts and completely liquid accounts. Finally, Heidues and Strack (2019) and Mahajan et al (2020) discuss methodological issues related to the identification of present-bias and behavioral discounting in econometric models.…”