Present Bias: Lessons Learned and to Be Learned
- (pp. 273-79)
Abstract
While present bias is an old idea, it only took hold in economics following David Laibson's (1994) dissertation. Over the past 20 years, research has led to a much better theoretical understanding of present bias, when and how to apply it, and which ancillary assumptions are appropriate in different contexts. Empirical analyses have demonstrated how present bias can improve our understanding of behavior in various economic field contexts. Nonetheless, there is still much to learn. In this paper, we give our assessment of some lessons learned, and to be learned.Citation
O'Donoghue, Ted, and Matthew Rabin. 2015. "Present Bias: Lessons Learned and to Be Learned." American Economic Review, 105 (5): 273-79. DOI: 10.1257/aer.p20151085Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D61 Allocative Efficiency; Cost-Benefit Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D15 Intertemporal Household Choice; Life Cycle Models and Saving