At this year’s Doctoral Workshop on Quantitative Dynamic Economics in Marseille, France, Marcin had the pleasure of attending a workshop dedicated to PhD students interested in dynamic economics. He presented his work on the role of imperfect self-control in shaping wealth accumulation and wealth inequality. The paper models imperfect self-control through temptation preferences in the sense of Gul and Pesendorfer (2001). It shows that temptation preferences introduce a novel term into the consumption–saving problem that endogenizes the discount factor, implying state-dependent discounting. Relative to standard frameworks with fixed time preferences, temptation provides a structural and behaviorally grounded explanation for heterogeneity in discount rates and for the positive association between patience and wealth, matching several empirical regularities. The paper also shows that a parsimonious model incorporating imperfect self-control is able to match the observed wealth distribution more closely than a rational benchmark. In addition, temptation preferences shape the distributional effects of taxation.

The workshop’s atmosphere and the small group of PhD students selected to present created an excellent environment for detailed discussion and valuable feedback. We are especially grateful to Frédéric Dufourt for organizing the workshop and inviting us to take part.