This thesis explores the implications of non-human primates’ propensity to hyperbolically discount the future. Hyperbolic discounting occurs when small, near-term rewards are preferred over larger rewards that are realized at a future point in time, but these preferences do not hold when the choice between long term and short term rewards is made at a time far removed from when the choice produces rewards-- i.e., at a time when the payoff of the choice is distant. I discuss two mutually exclusive models that attempt to explain why non-human primates hyperbolically discount: the cognitivist and the behaviorist model. I then present evidence that supports the cognitivist model and undermines the behaviorist model. I then argue that a “War of Interests” (WOI) occurs within the non-human primate mind. I explain this WOI model, discuss its philosophical implications, and then conclude with a general theory of the non-human primate mind.

<p>This paper analyses the pricing on spare parts. Empirical studies have showed that manufacturers of durable goods make an unproportional large profit on its spare parts in relation to the revenue it generates. It is first showed that according to the standard economic model the price on spare part ought to be zero since the producer include an insurance in the price of the main good. Further it is showed that moral hazard alone do not explain the pricing found in the studies. Finally an analysis of whether consumers with present-biased preferences could be a possible explanation is made. The analysis finds that it is a possibility however somewhat unlikely.</p>

This paper analyses the pricing on spare parts. Empirical studies have showed that manufacturers of durable goods make an unproportional large profit on its spare parts in relation to the revenue it generates. It is first showed that according to the standard economic model the price on spare part ought to be zero since the producer include an insurance in the price of the main good. Further it is showed that moral hazard alone do not explain the pricing found in the studies. Finally an analysis of whether consumers with present-biased preferences could be a possible explanation is made. The analysis finds that it is a possibility however somewhat unlikely.

A la hora de comprar a crédito, la evidencia empírica así como la meramente anecdótica sugieren que los consumidores se centras más en la cuantía de los pagos mensuales que en el tipo de interés del préstamo o la cantidad total que han de pagar. Los dos primeros capítulos de esta tesis exploran el papel del los problemas de auto control a la hora de explicar este comportamiento. Nuestro análisis se basa en el supuesto de descuento hiperbólico (Laibson (1997)) como forma de modelar el auto control. En el primer capitulo de la tesis consideramos un modelo de equilibrio parcial en el que la duración del préstamo y el tipo de interés están fijos y los consumidores pueden elegir cuánto tomar prestado y como repartir la devolución del préstamo entre los diferentes periodos. Mostramos que tener problemas de auto control implica mayores niveles de endeudamiento y que ser consciente de estos problemas o poseer la capacidad de comprometerse a un curso de acción reduce la presión sobre esos niveles. También demostramos que tener problemas de auto control y ser naif sobre ellos puede inducir una preferencia por los préstamos que requieren mayores cuotas hacia el final de su duración. El segundo capitulo analiza la interacción entre un prestamista monopolístico y un consumidor con descuento cuasi hiperbólico en un modelo en el que asumimos cuotas mensuales idénticas y permitimos al consumidor elegir entre distintas duraciones del préstamo. Obtenemos que mientras el tipo de interés del préstamo permanezca por encima del tipo de interés de mercado, en un contrato de equilibrio los consumidores con preferencias dinámicamente inconsistentes eligen préstamos con mayor duración (y por lo tanto con cuotas mensuales más bajas)El tercer capitulo de esta tesis, un trabajo conjunto con Alena Bicakova, proporciona evidencia empírica sobre el impacto de los problemas de auto control en el comportamiento de los consumidores a la hora de pagar sus deudas. El análisis viene motivado por resultados de encuestas que indican que un porcentaje significativo de los prestatarios atribuyen a una mala gestión de la deuda sus dificultades financieras. Esto contrasta con el argumento económico estándar según el cual la falta de pago de una deuda se debe a shocks negativos inesperados ya sea en los ingresos o en los gastos. Nuestra conjetura es que la mala gestión de la deuda y la falta de autocontrol están relacionadas y que tienen efectos adversos sobre el comportamiento de los prestatarios a la hora de devolver su deuda. Con el fin de verificar esta conjetura utilizamos una base de datos única en su naturaleza y procedente de una organización benéfica dedicada a la orientación a consumidores con créditos del Reino Unido. La orientación de crédito asiste a prestatarios seriamente endeudados mediante la elaboración y administración de unos planes de repago llamados Planes de Gestión de Deuda (DMP en ingles). Mostramos que la probabilidad de abandonar un DMP aumenta en un 12% y en un 31% respectivamente cuando las razones que se aducen para explicar el exceso de deuda (relacionadas con su mala gestión) y fumar se utilizan como indicadores. Como hasta cierto punto estos indicadores pueden usarse como una medida aproximada de los problemas de auto control, nuestros resultados sugieren una potencial relación entre las tasas de morosidad y la falta de auto control. / When buying on credit, anecdotal and empirical evidence suggest that the consumers focus more on the size of the monthly payments than on the interest charged on the loan or the total amount they pay. The first two chapters of this thesis aim to explore the role of self-control problems in explaining this puzzling behaviour. Our analysis relies on the assumption of the "quasi-hyperbolic discounting" (Laibson (1997)) to model self-control. In the first chapter of the thesis, we consider a partial equilibrium setting in which the loan maturity and the interest rates are fixed and the consumers can choose how much to borrow and how to allocate the repayments between different periods. We show that having self-control problems implies higher levels of borrowing whilst awareness of self-control problems or a lack of commitment puts downward pressure on that level. We also demonstrate that having self-control problems and being naive about them can induce a preference for back-loaded repayment plans which require higher repayments towards the end of the loan term. The second chapter looks at the interaction between a monopolistic lender and a consumer with quasi-hyperbolic discounting in a setting where we assume equal monthly payments and allow the consumer to choose between different loan maturities. We show that when market risk free rate exceeds the long run discount rate, in an equilibrium contract, the consumers with dynamically inconsistent preferences choose the loan with longer maturity (hence lower monthly payments). Third chapter of this thesis, which is a joint work with Alena Bicakova, provides empirical evidence on the impact of self-control problems on consumers' debt repayment behaviour. The analysis is motivated by the survey evidence which shows that a significant percentage of borrowers blame the debt mismanagement as the reason for running into financial troubles. This contrasts with the standard economic argument that default on debt is caused by the unexpected negative shocks to income or to expenditure. Our conjecture is that the debt mismanagement and lack of self-control are linked, and they have adverse effects on the debt repayment performance of the borrowers. In order to test this conjecture, we use a unique administrative data set of a major consumer credit counselling charity in the UK. Credit counselling assists heavily indebted borrowers by setting up and administering repayment plans, so called debt management plans or DMPs. We show that probability of dropping out from a DMP increases by 12 per cent and 31 cent when the self-reported reasons for becoming overindebted (related to debt mismanagement) and smoking are used as indicators, respectively. To the extent that these indicators can be used as a valid proxy for self-control problems, our results point to a potential link between default rates and lack of self-control.

<p>In this dissertation, I discuss two important factors in individuals' decision-making processes: subjective expectation bias and time-inconsistent preferences. In Chapter I, I look at how individuals' own subjective expectations about certain future events are different from what actually happens in the future, even after controlling for individuals' private information. This difference, which is defined as the expectation bias in this paper, is found to have important influence on individuals' choices. Specifically, I look into the relationship between US elderly's subjective longevity expectation biases and their smoking choices. I find that US elderly tend to over-emphasize the importance of their genetic makeup but underestimate the influence of their health-related choices, such as smoking, on their longevity. This finding can partially explain why even though US elderly are found to be more concerned with their health and more forward-looking than we would have concluded using a model which does not allow for subjective expectation bias, we still observe many smokers. The policy simulation further confirms that if certain public policies can be designed to correct individuals' expectation biases about the effects of their genes and health-related choices on their longevity, then the average smoking rate for the age group analyzed in this paper will go down by about 4%.</p><p>In Chapter II, my co-author, Hanming Fang, and I look at one possible explanation to the under-utilization of preventive health care in the United States: procrastination. Procrastination, the phenomenon that individuals postpone certain decisions which incur instantaneous costs but bring long-term benefits, is captured in economics by hyperbolic discount factors and the corresponding time-inconsistent preferences. This chapter extends the semi-parametric identification and estimation method for dynamic discrete choice models using Hotz and Miller's (1993) conditional choice probability approach to the setting where individuals may have hyperbolic discounting time preferences and may be naive about their time inconsistency. We implement the proposed estimation method to US adult women's decisions of undertaking mammography tests to evaluate the importance of present bias and naivety in the under-utilization of mammography, controlling for other potentially important explanatory factors such as age, race, household income, and marital status. Preliminary results show evidence for both present bias and naivety in adult women's decisions of undertaking mammography tests. Using the parameters estimated, we further conduct some policy simulations to quantify the effects of the present bias and naivety on the utilization of preventive health care in the US.</p> / Dissertation

<p>This dissertation concerns methods to test whether or not self-control</p><p>is costly, the form of temptation, and the affects different assumptions</p><p>about costly self-control and temptation have on optimal borrowing</p><p>and saving mechanisms. The second chapter shows that costly self-control</p><p>and temptation can be differentiated from changing impatience in a</p><p>stochastic income consumption-savings environment. The third chapter</p><p>describes an experiment to test whether subjects have time inconsistent</p><p>preferences, whether self-control is costly, and if so, whether the</p><p>cost of self-control is time dependent. The fourth chapter describes</p><p>the affects on the optimal borrowing and savings mechanisms that assumptions</p><p>about the myopia of temptation and the strength of costly self-control</p><p>have.</p> / Dissertation

The thesis analyzes the measure of academic procrastination among students and the measure of general procrastination among working population with a university degree. The thesis includes 3 studies. In study 1 an experiment was conducted on 33 students of the University of Economics in Prague. The results show, that students achieve better academic results given external, evenly distributed deadlines compared to when they are allowed to set the deadlines themselves. The second study analyses long-term data about 1909 students of the University of Economics and their academic results. The results show that procrastination can influence as much as 8% of the final grade. Study 3 analyzes information about 2487 subjects and their tax-return forms. It puts into context the dates of submission of the tax returns and personal characteristics of the submitters. The results show that procrastination declines with age. Methods on how to fight procrastination are suggested at the end of the thesis.

As of Russia's invasion of Ukraine we are now living in a time of full-scale war in Europe. This has ended a long period of relative peace and radically changed the security situation around the world. At the same time, the Swedish payment market has undergone a major shift in regards to cash versus digital payment. Today in Sweden, digital payments account for 96 percent of all payments, and these are made through private market actors. In response to the digitalization of the payment market, cash has been largely marginalized. Due to this coexistence, with a changed payment market and current security situation, this study aims to examine the risk management associated with payments during a potential invasion of Sweden, and the role of cash as a method of payment in wartime.  A fundamental principle assumed in this study is that the risks associated with payments in wartime are of the type Low Probability/High Consequence (LP/HC). These types of risks are particularly difficult to manage and there is thus reason to consider that the risk management of payments during an invasion may be insufficient. In this study we have constructed our own model, in order to analyze this issue, which includes three factors. These are lack of rationality, the public goods problem and hyperbolic discounting. The model aims to explain different problems and behaviors of decision-makers which may lead to inadequate risk management of LP/HC risks and thus deficient overall risk management of payments during an invasion. Throughout the study, we use the minimax-principle from game theory to further study the risk management of payments during an invasion as an LP/HC risk. In this qualitative study, eleven experts have been interviewed using a fictitious scenario of an invasion of Sweden. This functioned as the framework within which the experts then applied their insight to payments in war.  The results of the study show that the risk management of payments during an invasion has been overlooked and that lack of rationality, the public goods problem and hyperbolic discounting are all contributing factors to the problems we have identified. Further, the study defines that the payment system's lack of division of responsibilities and coordination, the unclear role of cash, as well as the cost issue and political game, are the determining factors regarding the lack of risk management around payments during an invasion. In conclusion, it is shown herein that cash does have a role to play during an invasion, but that extensive reformations must be made to increase the infrastructure around cash management.

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The thesis presents a formal model of intertemporal decision problem of working on a task for distant reward which depends on the number of periods the subject actually spends working, where the subject faces varying opportunity costs of working each period before the deadline. Three psychologically plausible causes of procrastination are incorporated into the model as transformations of the decision problem. In order to assess a hypothesis that procrastination is an evolved and stable habit, the third transformation renders the model dynamic in that past decisions and circumstances affect the present. The model is first explored via qualitative analysis and simulations are performed to further reveal its functionality.