We often forego a larger future reward in order to obtain a smaller reward immediately, known as impatient intertemporal choice. The current study investigated the role of Pavlovian-to-instrumental transfer (PIT) as a mechanism contributing to impatient intertemporal choice, following a theoretical framework proposing that cues associated with immediate gratification trigger a Pavlovian approach response, interfering with goal-directed (instrumental) inhibitory behavior. We developed a paradigm in which participants first learned to make instrumental go/no-go responses in order to win rewards and avoid punishments. Next, they learned the associations between Pavlovian cues and rewards varying in amount and delay. Finally, we tested whether these (task-irrelevant) cues exerted transfer effects by influencing instrumental actions while participants again completed the go/no-go task. Across two experiments, Pavlovian cues associated with larger (versus smaller) and immediate (versus delayed) rewards were evaluated more positively, reflecting the successful acquisition of Pavlovian cue–outcome associations. These findings replicated the previously reported classical transfer effect of reward amount on instrumental behavior, as large (versus smaller) cues increased instrumental approach. In contrast, we found no evidence for the hypothesized transfer effects for reward delay, contrary to the proposed role of PIT in impatient intertemporal choice. These results suggest that although both reward amount and delay were important in the evaluation of cues, only the amount associated with cues influenced instrumental choice. We provide concrete suggestions for future studies, addressing instrumental outcome identity, competition between cue–amount and cue–delay associations, and individual differences in response to Pavlovian cues.

Adopting eco-friendly technologies, such as converting lawns to alternative low-input grass species, can reduce household expenditures and mitigate negative environmental impacts at the same time. However, the rate of adoption of these technologies has not been as high as expected. This study develops a behavioral framework to identify barriers to new technology adoption by incorporating both prospect theory and present bias. We apply the framework in a choice experiment to investigate the relative importance of several factors that shape decisions associated with adoption of low-input turfgrass. We find that loss aversion plays a significant role. Though consumers exhibit present bias, long-term benefits still matter to them. Insights from the behavior model suggest that marketing and government programs that promote cost–benefit-efficient technologies should focus on eliminating or reducing potential losses caused by product failure.

One of Friedrich Hayek's most important arguments pointed to the epistemic advantages of the price system, regarded as an institution. As Hayek showed, the price system incorporates the information held by numerous, dispersed people. Like John Stuart Mill, Hayek also offered an epistemic argument on behalf of freedom of choice. A contemporary challenge to that epistemic argument comes from behavioral economics, which has uncovered an assortment of reasons why choosers err, and also pointed to possible distortions in the price system. But, even if those findings are accepted, what should public institutions do? How should they proceed? A neo-Hayekian approach would seek to reduce the knowledge problem by asking what individual choosers actually do under epistemically favorable conditions. In practice, that question can be disciplined by asking five subsidiary questions: (1) What do consistent choosers, unaffected by self-evidently irrelevant factors, end up choosing? (2) What do informed choosers choose? (3) What do active choosers choose? (4) When people are free of behavioral biases, including (say) present bias or unrealistic optimism, what do they choose? (5) What do people choose when their viewscreen is broad, and they do not suffer from limited attention? These questions are illustrated with reference to the intense controversy over fuel economy standards.

Under dynamic efficiency, a pay-as-you-go (PAYG) pension scheme helps the current generation of retirees but hurts future generations because they are forced to save via a return-dominated scheme. Abandoning it is deemed welfare-improving but typically not for all generations. But what if agents are present-biased (hence, undersave for retirement) and the “paternalistically motivated forced savings” component of a PAYG scheme motivated its existence in the first place? This paper shows it is possible to transition from such a PAYG scheme on to a higher return, mandated fully-funded scheme; yet, no generation is hurt in the process. The results inform the debate on policy design of pension systems as more and more policy makers push for the transition to take place but are forced to recognize that current retirees may get hurt along the way.

Two competing explanations for why consumers have trouble with financial decisions are gaining momentum. One is that people are financially illiterate since they lack understanding of simple economic concepts and cannot carry out computations such as computing compound interest, which could cause them to make suboptimal financial decisions. A second is that impatience or present-bias might explain suboptimal financial decisions. That is, some people persistently choose immediate gratification instead of taking advantage of larger long-term payoffs. We use experimental evidence from Chile to explore how these factors appear related to poor financial decisions. Our results show that our measure of impatience is a strong predictor of wealth and investment in health. Financial literacy is also correlated with wealth though it appears to be a weaker predictor of sensitivity to framing in investment decisions. Policymakers interested in enhancing retirement well-being would do well to consider the importance of both factors.