Beyond Beta-Delta: The Emerging Economics of Personal Plans

Personal plans

John Beshears, Katherine L. Milkman, Joshua Schwartzstein

In his book Misbehaving: The Making of Behavioral Economics, Richard Thaler writes about “Supposedly Irrelevant Factors” (SIFs), or factors that observably affect economic decisions but are neglected by neoclassical models of consumer behavior (Thaler 2015). In this article, we highlight an important SIF that is neglected not only by neoclassical models, but also by now-standard behavioral economics models like the beta-delta model of time discounting (Laibson 1997). That SIF is a “personal plan.”

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