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The Shape of Temptation: Implications for the Economic Lives of the Poor

  • Abhijit Banerjee


  • Sendhil Mullainathan

This paper argues that the relation between temptations and the level of consumption plays a key role in explaining the observed behaviors of the poor. Temptation goods are defined to be the set of goods that gen- erate positive utility for the self that consumes them, but not for any previous self that anticipates that they will be consumed in the future.

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Paper provided by eSocialSciences in its series Working Papers with number id:2484.

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Date of creation: May 2010
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Handle: RePEc:ess:wpaper:id:2484
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  8. Harris, Christopher & Laibson, David, 2001. "Dynamic Choices of Hyperbolic Consumers," Econometrica, Econometric Society, vol. 69(4), pages 935-57, July.
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  11. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  12. Gary S. Becker & Casey B. Mulligan, 1994. "On the Endogenous Determination of Time Preference," University of Chicago - George G. Stigler Center for Study of Economy and State 98, Chicago - Center for Study of Economy and State.
  13. Esther Duflo & Michael Kremer & Jonathan Robinson, 2009. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," NBER Working Papers 15131, National Bureau of Economic Research, Inc.
  14. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory And Evidence," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1261-1303, November.
  15. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April.
  16. Ted O'Donoghue & Matthew Rabin, 2005. "Optimal Sin Taxes," Levine's Bibliography 784828000000000346, UCLA Department of Economics.
  17. Jean Dreze & Peter Lanjouw & Naresh Sharma, 1997. "Credit in rural India: a case study," LSE Research Online Documents on Economics 6692, London School of Economics and Political Science, LSE Library.
  18. Bhaduri, Amit, 1977. "On the Formation of Usurious Interest Rates in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 1(4), pages 341-52, December.
  19. Katherine L. Milkman & Todd Rogers & Max H. Bazerman, 2009. "Highbrow Films Gather Dust: Time-Inconsistent Preferences and Online DVD Rentals," Management Science, INFORMS, vol. 55(6), pages 1047-1059, June.
  20. Katherine Milkman & Todd Rogers & Max Bazerman, 2010. "I’ll have the ice cream soon and the vegetables later: A study of online grocery purchases and order lead time," Marketing Letters, Springer, vol. 21(1), pages 17-35, March.
  21. Aleem, Irfan, 1990. "Imperfect Information, Screening, and the Costs of Informal Lending: A Study of a Rural Credit Market in Pakistan," World Bank Economic Review, World Bank Group, vol. 4(3), pages 329-49, September.
  22. Mary Kay Gugerty, 2007. "You Can’t Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 251-282.
  23. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279.
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  25. Subramanian, S. & Deaton, A., 1994. "The Demand for Food and Calories," Papers 175, Princeton, Woodrow Wilson School - Development Studies.
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