April 2009
This paper considers an intertemporal decision problem in which the agent has limited foresight. It offers an interpretation of why people may smoke when they are young - and arguably have a short horizon of foresight – and refrain from smoking when they get older - and their foresight is better.
JEL Classification: [D030] Behavioral Economics : Underlying Principles [D840] Expectations; Speculations
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Philippe Jehiel jehiel@enpc.fr Andrew Lilico andrew.lilico@europe-economics.com
