skip to content

Faculty of Economics

Journal Cover

Harris, C. and Laibson, D.

Instantaneous gratification

Quarterly Journal of Economics

Vol. 128(1) pp. 205-248 (2013)

Abstract: Extending Barro (1999) and Luttmer and Mariotti (2003), we introduce a new model of time preferences: the instantaneous-gratification model. This model applies tractably to a much wider range of settings than existing models. It applies to both complete- and incomplete-market settings and it works with generic utility functions. It works in settings with linear policy rules and in settings in which equilibrium cannot be supported by linear rules. The instantaneous-gratification model also generates a unique equilibrium, even in infinite-horizon applications, thereby resolving the multiplicity problem hitherto associated with dynamically inconsistent models. Finally, it simultaneously features a single welfare criterion and a behavioral tendency towards overconsumption.

JEL Codes: C60, C73, D91, E21

Author links: Christopher Harris  

Publisher's Link: https://doi.org/10.1093/qje/qjs051



Papers and Publications



Recent Publications


Bhattacharya, D., Dupas, P. and Kanaya, S. Demand and Welfare Analysis in Discrete Choice Models with Social Interactions Review of Economic Studies [2023]

Bhattacharya, D. and Shvets, J. Inferring Trade-Offs in University Admissions: Evidence from Cambridge Journal of Political Economy, accepted [2024]

Bhattacharya, D. Nonparametric Approaches to Empirical Welfare Analysis Journal of Economic Literature [2024]

Bhattacharya, D. and Komarova, T. Incorporating Social Welfare in Program-Evaluation and Treatment Choice Review of Economics and Statistics, accepted [2024]