This paper introduces a general framework for dealing with dynamic inconsistency in the context of Markov decision problems. It carefully decouples and examines concepts that are often entwined in the literature: it distinguishes between the decision maker and its various temporal agents, and between the beliefs and intentions of the agents. Classical examples on naive and sophisticated decisio...

Article history: Received 7 March 2008 Received in revised form 19 April 2010 Accepted 19 April 2010 Recent studies have found that China is “special” in exporting highly sophisticated goods not comparable with its income level. In this paper we identify two measurement biases that account for this “China is special” observation. First, product quality has not been fully considered in the measu...

Existing evidence suggests that individuals frequently misperceive the value of their wealth. We test existence, and estimate sign magnitude, an inaccurate perception individual net worth. By conducting a laboratory experiment, we find most subjects perceive given worth as greater than its true this misperception increases for lower values leverage ratio i.e., liabilities-assets ratio. identify...