Date of Award

5-2025

Degree Type

Creative Project

Degree Name

Master of Science (MS)

Department

Economics and Finance

Committee Chair(s)

T. Scott Findley (Committee Chair)

Committee

T. Scott Findley

Committee

James Feigenbaum

Committee

Todd Griffith

Abstract

This study examines how the presence of time-inconsistent preferences affects a representative individual's decisions about how much to consume, to save, and how intensively to work, in addition to the size of a bequest to leave behind at death. The model is used to analyze the behavior of both time-inconsistent individuals (characterized by a hyperbolic discount function) and the behavior of time-consistent individuals (characterized by an exponential discount function). The model demonstrates how these two representative types of individuals make intertemporal choices over time. While the model distinguishes between time-inconsistent and time-consistent individuals with respect to using alternative discount functions, the findings of this study indicate that the key behavioral outcomes of intensive labor supply, consumption, saving, and bequest size, can be observationally equivalent under many model parameterizations.

Share

COinS