Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/224593 
Year of Publication: 
2020
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
The recent literature has emphasized that government intervention when consumers have quasi-hyperbolic preferences ('bias for the present') over consumption is not welfare-enhancing. This paper introduces a market imperfection (which takes the form of a negative externality) and shows that government intervention is welfare-enhancing if the market imperfection is sufficiently strong or the consumers' bias for the present is weak. This conclusion holds, interestingly, even if the gocernment and the consumers share the same biased intertemporal preferences.
Subjects: 
Quasi-hyperbolic preferences
optimal savings
bias for the present
time consistent policy
externalities
JEL: 
H23
D15
D9
Document Type: 
Conference Paper

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