PARK, HYEON S.
(2012)
INTERTEMPORAL CHOICES WITH TEMPORAL PREFERENCES.
Doctoral Dissertation, University of Pittsburgh.
(Unpublished)
Abstract
This dissertation explores the general equilibrium implications of inter-temporal decision-making from a behavioral perspective. The decision makers in my essays have psychology-driven, non-traditional preferences and they either have short term planning horizons, due to bounded rationality (Essay 1), or have present biased preferences (Essay 2) or their utilities depend not only on the periodic consumption but are also dependent upon their expectations about present and future optimal consumption (Essay 3). Finally, they get utilities from the act of caring for others through giving and volunteering (Essay 4). The decision makers who are defined by these preferences are re-optimizing over time if they realize that their past decisions for today are no longer optimal and this is the key mechanism that helps replicate the mean lifecycle consumption data, which is known to be hump-shaped over the lifecycle. In the first essay, I prove that there is an income structure that leads to a consumption hump for each time preference. Searching via simulation, I find the best planning horizon that is compatible with matching data for the US economy. In the second essay, I find that the consumption hump is obtained even without the credit constraint if the agent is naive and keeps re-optimizing over time. In a third essay, I demonstrate that reference-dependent preferences can also generate a hump-shaped consumption profile when the agent has age-dependent loss aversion. In the fourth and the final essay, I show how the inclusion of time endowment generates full-blown lifecycle pattern of not only consumption, but also giving, leisure, and volunteer time, which closely follow the data.
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Details
| Item Type: |
University of Pittsburgh ETD
|
| Status: |
Unpublished |
| Creators/Authors: |
|
| ETD Committee: |
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| Date: |
27 September 2012 |
| Date Type: |
Publication |
| Defense Date: |
24 May 2012 |
| Approval Date: |
27 September 2012 |
| Submission Date: |
3 July 2012 |
| Access Restriction: |
No restriction; Release the ETD for access worldwide immediately. |
| Number of Pages: |
267 |
| Institution: |
University of Pittsburgh |
| Schools and Programs: |
Dietrich School of Arts and Sciences > Economics |
| Degree: |
PhD - Doctor of Philosophy |
| Thesis Type: |
Doctoral Dissertation |
| Refereed: |
Yes |
| Uncontrolled Keywords: |
INTERTEMPORAL CHOICES, TEMPORAL PREFERENCES, BEHAVIORAL ECONOMICS, BOUNDED RATIONALITY, PRESENT-BIASED PREFERENCE, REFERENCE-DEPENDENT PREFERENCE, CHARITABLE GIVING |
| Date Deposited: |
28 Sep 2012 02:06 |
| Last Modified: |
19 Jul 2024 18:29 |
| URI: |
http://d-scholarship.pitt.edu/id/eprint/12705 |
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