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On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents

Abstract : This article considers the long-run equilibrium distribution of an economy populated by heterogenous and present biased quasi-hyperbolic discounting agents. In a first configuration with logarithmic utility functions and Cobb-Douglas production technologies, this article establishes the existence and the uniqueness of the equilibrium : only one agent, determined by the highest value of a coefficient building from both the degree of present bias and the rate of discount, will have a positive long-run consumption and a positive long-run wealth. A second configuration with constant elasticities of substitution utilities and linear production technologies is then considered. This article similarly establishes the existence and the uniqueness of the equilibrium. There generically is a unique agent with the highest growth rate for his consumption and his wealth. This agent is determined by both preferences and technology parameters and may change following a technological shock.
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Contributor : Caroline Bauer <>
Submitted on : Friday, June 19, 2020 - 3:11:37 PM
Last modification on : Monday, April 19, 2021 - 10:22:21 PM

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Jean-Pierre Drugeon, Bertrand Wigniolle. On a Simple Equilibrium with Heterogeneous Quasi-Hyperbolic Discounting Agents. Revue d'Economie Politique, Dalloz, 2019, 129 (5), pp.715-740. ⟨10.3917/redp.295.0715⟩. ⟨halshs-02875235⟩

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