Time Inconsistency in the Credit Card Market

Does consumer behavior exhibit time inconsistency? This is an essential, yet difficult question to answer. This dissertation attempts to answer this question based on a large-scale randomized experiment in the credit card market

Author: shui, haiyan

Source: University of Maryland

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Contents

1 Introduction
2 Studies of Time Discounting
3 A Unique Dataset
4 A Multi-period Complete Information Model
4.1 Time preferences and Model Set-up
4.2 “Rank Reversal”
4.2.1 “Rank Reversal” Impossible for Exponential Agents
4.2.2 “Rank Reversal” Possible for Hyperbolic Agents
5 A Multi-period Incomplete Information Model
5.1 Model Setup
5.2 Numerical Simulation and Model Prediction
6 Estimation
6.1 Estimation Strategy
6.2 Estimation Results
6.3 Robustness
7 Conclusion
A Sign ofdA1 dβ1
B Income Process
Bibliography

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