Time-inconsistent preferences, consumption, investment and life insurance decisions

作者：Shou Chen, Guangbing Li · 发表于：Applied Economics Letters · 年份：2019 · DOI：10.1080/13504851.2019.1617395 · 被引用次数：10 · 研究领域：Economic theories and models、Decision-Making and Behavioral Economics、Housing Market and Economics

In this paper, we study a consumption, investment and life insurance strategy model in which agent has time-inconsistent preferences. We numerically find that time-inconsistent preferences lead agent to more consumption–wealth ratio and less insurance–wealth ratio, and that time-inconsistent agent purchases life insurance in advance. Moreover, both the consumption–wealth ratio and amount of life insurance purchased for naive agent are less than for sophisticated one, while total available wealth for naive agent is more than for sophisticated one. In particular, total amount of life insurance purchased increases when agent is young, but the situation reverses when she is older.